Remortgages And Homeowner Loans Otherwise Secured Loans Are Similar.

Remortgages and homeowner loans, often called secured loans, are very close cousins of each other, as they are both part of the group of financial products known as home loans.

Home loans are, as the name suggests, connected to houses in some shape or form, and in this case the home is an owner occupied property, meaning that these loans only apply to those who have purchased the home in which they reside and have not rented it either from a private individual or a local council.

Before we can consider what a remortgage is we must make at least a passing reference to mortgages and what a mortgage is is the loan required to buy a house.

This is the case whether it is a first time buyer wanting to buy his first property or to a home mover, that is a person who is already a homeowner, and who wishes to move to another property.

Mortgages usually have a specific period in which the mortgage deal originally taked out remains in place.

Two years is the most common tie in period although one year is possible as is five years or more.

That means that if a mortgage is taken out on a tracker rate of 1.89%, for example, above base it means that for the agreed period the rate will always be 1.89% above the base rate and at present as the Bank Of England Base Lending Rate is 0.05% the rate for the previous example would be 2.39% and if the rate is 1.34% above base the current rate would be 1.84%.

At the end of the two years or whatever the rate reverts to the Standard Variable Rate which is normally more expensive than the original mortgage and this is why after the tie in period most homeowners consider arranging a remortgage as they should be able to obtain a better rate of interest.

Therefore a remortgage is the changing of a mortgage from one provider to another often with the sole intention of obtaining a lower rate of interest, and as rates vary tremendously from one lender to another a homeonwer can expect to get a better deal.

In addition to remortgages being a way to achieve lower mortgage payments they can also be used for raising funds for a multitude of reasons.

Homeowner loans which are also called secured loans, obviously due to the fact tht they are exclusively for homeowners and that they are secured on property.

Both remortgages and secured loans/ homeowner loans are secured on property and releasing some equity grants funds that can be used for almost any legitimate purpose.

A remortgag pays off the existing mortgageand becomes the new first charge, and a homeowner loan does not interfere in any way with the mortgage which remains as before.

The bottom line is that both of these home loans are excellent low interest methods of raising funds.