While remortgages and secured loans are similar types of home loans, they are also different in many ways
The main feature that these home loans have that relates them, is the fact that both depend on the equity that is on the home of the applicant.
Secured loans are also known as homeowner loans which makes it perfectly obvious that these loans are only available to those who own their own homes.
Equity is the difference between what a house is worth and the balance of the mortgage that is secured on it.
Until the start of 2007 secured loans were possible at 25% more than the actual value of the property and this was known as the 125% equity plan.The maximum now is 80% for employed applicants and 70% for those in employment.
Similarly the Northern Rock offered both mortgages and remortgages at up to 125% with remortgages of 100% available from most lenders.
The maximum LTV now for remortgages is 90%, while certainly better than that for secured loans is still much less lenient than before the recession.
Before the credit crisis, self certifications of earnings were taken as income proof by remortgage and secured loan lenders but that ended
For some time no lender accepted self certs for either homeowner loans or remortgages but this has altered in favour of secured loans
Both remortgages and secured loans have a vast variety of uses from going on a special holiday and they are both good methods of debt consolidation.
These secured loans for the self employed have however certain limitations as they must have a lot of equity at a maximum of 60% and the biggest available loan is 30,000. In addition, the borrower must show my means of three months bank statements that they do in fact have income deposited.
These self employed loans of this kind will be a useful alternative to those who cannot obtain a remortgage due to a lack of accounts.
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