Find Out If You Can Apply For A Remortgage Or A Secured Loan

When someone decides that the time is right to arrange a remortgage or a secured loan their first thought is if they qualify or not.

The first thing is that is as they are secured loans, there must be enough equity in the property, as both are forms of homeowner loans that need to be secured on the asset of a property.

Equity is the difference between the mortgage balance and the value of the security property, and an example of this is that if a property is worth 430,000 and the mortgage on the property stands at 340,000, the available equity is 90,000.

These figures in no way mean that a homeowner could obtain a secured loan of 100,000 or a remortgage of 270,000, as there no longer the availability of remortgages and secured loans of 100% or even 125% as there was once.

For someone considering remortgages they must bear in mind that the maximum LTV is 90% although the majority of mortgage lenders restrict it to 85%.

As for secured homeowner loans, the maximum LTV was raised a week ago to 85% for those who are employed and 10% less for the self employed.

Just as equity is essential, so too is the correct amount of income. Mortgage lenders in general use an income multiplier which varies from one t the other but is normally from a little more than three times the income to as much as five times.

Companies arranging secured loans have a different method of judging affordability which is allowing 40% of gross earnings to pay for the monthly mortgage repayment, the prospective homeowner loan, and any unconsolidated credit.

Many homeowners use remortgages or secured loans as debt consolidation loans and as such there are no unconsolidated debts to be taken into the income equation.

Homeowners with the correct amount of equity and income should make an application for these versatile home loan products.

Learn more about loans. Stop by Champion Finance’s site where you can find out all about the best remortgage and what it can do for you.