Preferred Real Estate

It has been discovered that the interest rates for unsecured loans are higher than at almost any time in the past and at their highest rate for the past nine years which all seems rather strange when the Bank of England Base lending Rate still holds at the lowest rate ever at 0.05%

Nine years ago the Base Lending Rate was more than 5% higher than the 0.05% rate of now.

Unsecured loans are therefore at their highest rate in spite of the low base rate now compared to the first few years of this decade.

As well as the interest rates being high, it is also more difficult now than in the past to obtain an unsecured loan although it is a fact that unsecured loans were always only available to individuals with good credit ratings.

As unsecured loan are as is obviously unsecured without any security the lender always for example requires proof as to the purpose of the loan, and if the loan is needed for fitting a new bathroom several estimates are required.

There are all sorts of loans both unsecured and secured , but if you are a homeowner it is wise to use your status as such to borrow at great interest rates by means of the home loan products of remortgages and secured loans.

These two loans are of course only available to homeowners as they are both secured on property, and they are both excellent methods by which homeowners can raise finance which can be used for many purposes.

There are various matters to consider as to which is the better product at any particular time to be considered.

Homeowners are tied into a mortgage for several years after the start date of the mortgage and during these years they are required to pay an early repayment penalty if they pay off the mortgage early and this can amount to thousands of pounds.

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.

The world of secured home loans in general can be confusing to the layman.

Certain individuals are not really certain what these different financial home loan products are in fact.They are unsure of what is a mortgage, a remortgage and a secured loan.

Let us start with mortgages. A mortgage is a home loan used to purchase a property. This can be a first house purchase whereby someone requires a mortgage to become a homeowner for the first time, having up to that point stayed in rented property or for younger people having lived with parents.

Most people need to take out a mortgage they are well off and have enough money saved to pay for the property, and most people are not in this fortunate position.

A mortgage can be obtained from a bank or a building society, and the prospective mortgage borrower will be required to go into a branch for an interview, and to produce certain documentation.

The information you are required to produce is wage information, bank statements, proof of identity which means a passport or a driving licence, proof of residency which is such things as utility bills etc. and these require to be dated within the last two months. Most mortgage lenders also require sight of three months bank statements to check on your financial out goings.