If a homeowner wants to obtain finance for a number of purposes there are two real options of doing this, and these two ways are either by means of a secured loan or a remortgage.

Both secured loans and remortgages are loans that are secured on the equity on a property, and therefore only people who actually own their property can apply.

Which is preferable depends on several circumstances, and there are occasions depending on personal circumstances when one is preferable to the other.

Secured loans should be the loan of choice for homeowners who are in the first few years of a tie in period with their current mortgage lender. During the tie in period there is an early repayment penalty if the mortgage is repaid with a remortgage.

This can cost the homeowner thousands of pounds in charges as the penalty can be from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 300,000, the penalty would be from 6,000 to as much as 15,000. Therefore to remortgage in such circumstances would be an act of madness, and a secured loan would be the road to take.

If the loan funds are needed quickly, again the secured loan is the better alternative, taking half the time of the remortgage to arrange, from two to three weeks for the secured loan compared to four to six weeks if remortgaging.

If neither of the previous statements apply to you a remortgage could well be preferable as the interest rates for a remortgage are normally lower. At this moment in time if the homeowner has at least a 40% deposit interest rates of under 2% are currently available.

Secured loan rates now start at around the 9% mark which is good but still more expensive than the remortgage.

Therefore whether a remortgage or secured loan is better depends on the circumstances of the remortgage or secured loan applicant.

Want to find out more about remortgages, then visit Champion Finance’s site and find the best remortgage for your needs.

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