Most people have heard of a secured loan and a remortgage but they are uncertain as to what they are , how they can be used and so on.

The first main thing that must be pointed out, is that both of these are home loans for which only those who have bought their property can apply, as they are both two financial products that require to be secured against the asset of a property.

A remortgage means changing from a current mortgage lender to a new one.

You may wonder what the point of changing mortgage lenders is, well the point is to obtain a lower monthly payment, as rates do vary considerably between one provider and the other.

The average person has a mortgage in excess of 100,000, and many homeowners have mortgages of much more than this, with mortgages over one million not being unknown.

Even a slighltly lower rate can grant vast savings every month.

It is sometimes a like for like remortgage that is applied for, and sometimes additional funds are raised.

Secured loans do not interfere with the current mortgage, but they rank after the current mortgage which is known as the first mortgage.

This is the reason for their other name which is a second mortgage. This is exactly what these loans are.

Secured loans can be used for all the exact same reasons as remortgages, and they too are also good consolidation loans.

Remortgages come in various types, such as fixed rates, whereby the payment is set at the same for a certain time, of normally between one year up to five years.

The longer the period is fixed, the more expensive the monthly payment is.

However, a fixed rate does at least mean that the homeowner knows fully what his mortgage will cost for a predetermined period.

Tracker rates are also on the market, and these are cheaper than the fixed product, but can, and in fact will rise when the Bank Of England Base Lending Rate increases which it inevitably will.

Secured loans are more expensive than their cousins, being from about 9% at present, while a tracker remortgage rate starts at less than 2%, if the homeowner has equity of 60% or less on his property.

Secured loans take normally about three weeks to complete, as the applicant, by law, must be granted an eight day cooling off period.

Remortgages take longer to arrange than secured loans, and always take the minimum of a month and often more than this.

The documentation required for both is the same, and that is, proof of residency, identification for all applicants, the last three months bank statements and proof of income.

Full accounts, or at least an accountants certificate, stating net profit, are required for remortgage applications now.

Self certs are available for secured loans at restricted loan to value.

It is to be hoped that this information will prove useful to people considering taking out a remortgage or homeowner loan.