A Short Description About Secured Loans, Mortgages And Remortgages.
Although most people know and have often heard of mortgages, remortgages and secured loans, some are not completely certain of what these actually are and what they have in common, what are the differences between them, etc.
The first major feature that all three have in common is the fact that all three must be secured on property and this is the reason that they can all be called home loans.
Mortgages are the loans needed when a person wants to purchase a home.
Not many have enough money to pay for a property outright.
For some time, mortgage lenders limited the maximum loan to value for first time buyers to 75% which meant that it ws a pity for the many wanting to get their foot on the property ladder, as with an average home costing about 170,000, a deposit of over 40,000 was required
This has slackened somewhat, and as of last week Santander are advancing first time mortgage deals at 90%.,
There are fixed rate mortgages that, as it says on the box, fix the interest rate for a certain period which is normally from one year to five years
There are tracker mortgage deals that have interest rates that follow the base lending rate of The Bank Of England which makes them cheap at present, but when this rate goes up so will the mortgage rate.
The interest charged for these home loans varies not only from one lender to the other, but it very much depends on the amount of deposit offered by the borrower.
Remortgages are identical to mortgages as regards equity, interest rates and so on, which is to be expected when we consider that a remortgage is only a new mortgage arranged with a different provider either to obtain a lower rate of interest or to raise funds for almost any purpose.
Secured loans are homeowner loans that, like a remortgage, can be used for almost any reason, including debt consolidation.
However a secured loan, unlike a remortgage, does not take the place of the existing mortgage, and their interest rates, although still good at 9%, are normally more expensive than remortgages that commence at under 2% on a tracker basis for those with a 40% deposit.
Secured loans are excellent if a homeowner is in a tie in period with his mortgage.
This is only the main facts concerning these loans, but it is to be hoped that you found it helpful.
The first major feature that all three have in common is the fact that all three must be secured on property and this is the reason that they can all be called home loans.
Mortgages are the loans needed when a person wants to purchase a home.
Not many have enough money to pay for a property outright.
For some time, mortgage lenders limited the maximum loan to value for first time buyers to 75% which meant that it ws a pity for the many wanting to get their foot on the property ladder, as with an average home costing about 170,000, a deposit of over 40,000 was required
This has slackened somewhat, and as of last week Santander are advancing first time mortgage deals at 90%.,
There are fixed rate mortgages that, as it says on the box, fix the interest rate for a certain period which is normally from one year to five years
There are tracker mortgage deals that have interest rates that follow the base lending rate of The Bank Of England which makes them cheap at present, but when this rate goes up so will the mortgage rate.
The interest charged for these home loans varies not only from one lender to the other, but it very much depends on the amount of deposit offered by the borrower.
Remortgages are identical to mortgages as regards equity, interest rates and so on, which is to be expected when we consider that a remortgage is only a new mortgage arranged with a different provider either to obtain a lower rate of interest or to raise funds for almost any purpose.
Secured loans are homeowner loans that, like a remortgage, can be used for almost any reason, including debt consolidation.
However a secured loan, unlike a remortgage, does not take the place of the existing mortgage, and their interest rates, although still good at 9%, are normally more expensive than remortgages that commence at under 2% on a tracker basis for those with a 40% deposit.
Secured loans are excellent if a homeowner is in a tie in period with his mortgage.
This is only the main facts concerning these loans, but it is to be hoped that you found it helpful.
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