Remortgaging vs a Secured Loan: Which should you go for?
Secured loans and remortgaging can be an easy way for you to borrow additional money. Read on to find out which options work best for you.
Sometimes, in life, you may find yourself in a position where you have to borrow additional money. This’ll leave you with two main options if we're talking sums over £20,000, secured loans or remortgaging. If you don’t know what a remortgage is or what a secured loan is, then you’re in the right place! Read on to find out which one suits you best!
The downside is that, because the loan is secured against your property you will be liable for valuation & legal fees, which can be as much as several thousand pounds.
Remortgaging to help save you money:
Ok, before we start properly, let’s get to grips with the basics. Secured loans are essentially a means of generating cash against the value of your property. This is because the money that you borrow from your lender is secured against your home. This tends to mean that the interest rates on secured loans are cheaper than conventional loans as the lender has the security that a standard lender simply doesn't have.
Doesn’t sound too bad, does it? So, why might you remortgage instead? The important thing to remember about remortgaging is that you can either choose to go for a new deal with your current lender or a new lender altogether.
A lot of lenders are going to offer incentives for you to switch over. For example, they may offer you free legal fees, pay for a mortgage broker or even pay for your property valuation. This is going to be vital for you to take into account. This is because any fees that you thought might have nullified the money you’d be saving by switching over!
Why might you go for a secured loan instead of remortgaging?
So, if you feel like you’ve got to grips with what a remortgage is, you might be wondering why you might go for a secured loan instead? Ok, imagine this. You’re on a fixed rate mortgage deal and you’re currently benefiting from having a low rate deal. You might not want to give this up or suffer any sort of early repayment charges for leaving your current lender. You may be at your mortgage lenders maximum affordability or loan to value so can't borrow any additional funds.
Secured loans will allow you to carry on benefitting from a low rate and ensure that you don’t suffer from any early repayment charges! Getting a secured loan can also be a great idea if your employment status has changed during your mortgage. For example, if you’ve recently made a move to self-employment and tried to remortgage to a new lender, then it is unlikely that your new lender would view you as a financially secure borrower.
How can we help?
So, hopefully, you’ve understood what a remortgage is and how it compares to a secured loan. But, you still might be struggling to make the choice over which is better? No problem. At Mortgages Online and we can provide you with excellent advice to make your next move in the property market the right one for you! We compare 1000s of mortgage deals, from 100s of lenders to find the one that’s right for you. And, after all, we’re free and easy to use so no need to get your credit card out!
We also provide you with loads of information on all things surrounding mortgages, including bad credit mortgage advice, life insurance and home insurance info and so much more – all of this is available in our Articles section.