For an extended period, various people have regarded a remortgage as an option to raise money because of the interest rates that are accessible on mortgage are less than those from unsecured finance. There are now regulations which are mainly pushed by financial services authorities. According to many financial experts, it would be a wise decision to use a secured loan as a financial option rather than remortgage. An example of this is when a mortgage borrower has a large redemption on their current mortgage. Lenders are not usually the same and that they all have their laws and regulations and that is why as a borrower, your penalties will occur when you decide to pay part of your mortgage during the cheap period, or you want to switch lenders.
There are some fixed mortgage rates that have a penalty of up to seven percent of the existing mortgage balance in case it is redeemed in the fixed rate phase. There are factors that you need to consider when weighing the merits and demerits of secured loans and remortgages and one of them is the overall cost of the credit. When relating different products and services, you need to use the annual percentage rate tool as it will consider the fees and take them into consideration. For the remortgage procedure, there are different things which are involved, and these include valuation and administration charges, brokers fees, legal fees and lender fees. On the other hand, the secured loans have few additional charges, and this mainly depends on the arrangement of the lender and the fees for the broker.
So that you come up with an excellent advantageous financial resolution as a borrower, you need to link secured loans together with the total charges of the remortgage process. This analysis of the secured loans with the remortgage process costs is important for those who have a bad credit history. In the case the mortgage was taken before you run into credit issues, then any attempt to raise more money through a remortgage will imply paying a high-interest rate of the total money borrowed. A borrower will continue to enjoy their prime interest rate when they use secured loans, and the other new loan is charged differently.
While deciding on the best alternative to take between either applying for secured loans or a remortgage, you need to understand the period that is taken for the funds to be transported to the borrower. When you compare the accessibility between remortgage and secured loans, the secured loans are usually fast to obtain than the remortgage.