Remortgages and their close relative, the secured loan, have fluctuated a great deal in the last few years with the recession having a bad affect on these home loan products.
Prior to the recession, secured loans otherwise called homeowner loans or sometimes second mortgages were one of the most popular ways for homeowners to borrow.
These three names have very apparent reasons for their names. Firstly the name secured loan is derived from the fact that they need to be secured on an asset which is the home of the borrower.
The expression, homeowner loans, comes from the fact that only homeowners can apply due to the requirement of the property security.
Second mortgage comes about because these home loans are a type of mortgage that is placed behind the mortgage that already exists on the property.
A remortgage is a very similar financial product to a homeowner loan, as it is a home loan secured on property that has all the same uses as its cousin. Remortgages, as secured loans, can buy almost anything from a vehicle to a holiday home and all things in between.
Both secured loans and remortgages were popular before the recession with the self employed, as both could be obtained on a self declaration of income, and the former more readily so than the latter.
As stated, secured loans rank behind the current mortgage and do not interfere with it in any way. A remortgage, on the other hand, takes the place of the existing mortgage and is applied for either to get a lower interest rate or to obtain extra money to use for almost anything
There are pluses and minuses when comparing homeowner loans to remortgages. One of these is that if a homeowner wants a lot of additional money he will often be better to remortgage. As long as there is enough equity and the applicant has sufficient income, remortgages are available for almost unlimited amounts. Homeowner loans on the other hand are limited to between 75,000 to 100,000 but larger sums are sometimes available for special cases.
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