Over the years, a lot of people have viewed the mortgage industries as one of the best places where they can invest their money because there are high returns and the interest rates are fewer than those from unsecured finance. However, things have changed and that financial services authorities and increased regulation that has been witnessed. Financial experts advise against remortgaging as a way of raising money and they argue that there are other ways to raise money such as use of a secured loan. The most known example is when a mortgage debtor has a great redemption penalty on their already existing mortgage. These penalties pile up when a borrower wants to change a lender or pay a portion of their mortgage during the cheap rate period, and there are terms that differ among lenders. This has been discussed in details by chris brummer.
There are some fixed mortgage rates that have a penalty of up to seven percent of the existing mortgage balance in case it is redeemed in the fixed rate phase. Among the most critical aspects to deliberate when deciding between secured loans and remortgages is the general cost of the loan. When relating different products and services, you need to use the annual percentage rate tool as it will consider the fees and take them into consideration. Usually, the remortgage process entails various fees, and these include lender fees, administration and lender fees, brokers fees and in some instances legal fees. Very few additional fees are associated with secured loans and that is different from remortgages where different charges are accrued. For more information about this, visit: https://minilateralism.com.
So that you come up with an excellent advantageous financial resolution as a borrower, you need to link secured loans together with the total charges of the remortgage process. If you have a poor credit history, then you will need to have an evaluation of the whole remortgage process and the secured loans. In the case the mortgage was taken before you run into credit issues, then any attempt to raise more money through a remortgage will imply paying a high-interest rate of the total money borrowed. A borrower will continue to enjoy their prime interest rate when they use secured loans, and the other new loan is charged differently.
While deciding on the best alternative to take between either applying for secured loans and a remortgage, you need to understand the period that is taken for the funds to be transported to the borrower. Broad comparison between a secured loan and a remortgage is a good way of knowing what to choose, and you need to note that getting secured loans is much quicker than a remortgage. You can read more on these regulations at: https://www.huffingtonpost.com/entry/when-is-regulation-excessive_us_58c71a70e4b03400023f4a80.