August 15, 2013

Secured Loans – An Alternative to Remortgaging

Are there alternatives to remortgaging your property?
Secured Loans
This depends on what your goals are. If you want a better rate or you’re like to fix your mortgage for a certain period then of course you’ll need to seek a remortgage. If you want to raise capital, pay of debts or you’d like to borrow money against your house without incurring redemption charges then a secured loan may be a better option.

How Secured Loans Work

A secured loan is a loan issued against the title of your home. This means in the event of you defaulting on the loan the lender may be able to force the sale of your home to recoup and outstanding amounts. You should consider this fact carefully before taking out a secured loan.

With an unsecured loan the lender doesn’t have this security and so will normally be unwilling to lend large amounts and will only lend to those with good credit histories. A secured loan on the other hand gives the lender much more security over getting repaid and so they’re more willing to lend larger amounts of money or consider people with less than perfect credit histories.

Getting a Secured Loan

Many companies offer secured loans and the interest rate you pay on these loans varies greatly depending on your individual circumstances. There are various services, some free and some paid for that allow you to compare secured loans in order to find the best deal. It’s well worth trying these services if you’re considering taking out a loan as they’re often free and usually won’t impact your credit rating.

Conclusion

In conclusion, if you’re looking to raise money by borrowing against the equity in your house you may like to consider a secured loan instead of remortgage. This won’t be the right option for all people and all circumstances but it is a worthwhile consideration.

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