Classic Real Estate

After an extremely rocky couple of years, matters are becoming better in the secured loans, remortgages, mortgages sectors and for borrowing in general

Secured loans, remortgages and mortgages depend to a large extent on the value of property.

The fall in house prices had a devastating affect on these three home loans

When a person wants to purchase a home , they need to take out a mortgage, and very few buyers have the financial ability to pay cash. As house prices fell so too did the demand for mortgages, as people were not prepared to move house with all the financial burden it brings in such unsettled times.

Traditionally, mortgage payers would seek a remortgage when his existing mortgage deal was at an end. Remortgages involve moving the mortgage on the property from the existing lender to a new provider.

Sometimes only a like for like remortgage was required, which means that the remortgage amount is the exact same as the mortgage it is replacing, but a lower interest rate is sought. At other times, additional money was requested which could be used for a vast variety of reasons.

Remortgage applications declined, as due to the fall in the property values, there was not sufficient equity to get any better rate than that of the existing mortgage.

Secured loans declined for the same reason as the other two related products.

Secured loan lenders went down from over twenty to fewer than a handful, and those that remained tightened their underwriting to such an extent that even the lucky homeowners with equity were no longer eligible to apply.

Self employed were no longer permitted to self declare their earnings, rendering it impossible for them to obtain secured loans or remortgages.

Some improvement is at last being seen with the maximum LTV now being 70% for self employed applicants and 80% for those who are employed.

The best sign of improvement to secured loans so far has been the reintroduction by one lender of self employed loans on a self cert basis providing that the applicant for these self employed loans has equity of at least 60% and can produce three months bank statements.

Want to find out more about secured loans then visit Champion Finance’s site on how to choose the best remortgage for you.