If you are looking to use your home as a means to raise some capital, you have several options that our experts can help you to compare. Call us on 0845 450 9661 to find out more.
You can often remortgage your property to raise money – if there is some equity in your property then a residential remortgage could allow you to release some of these funds. However, you may also be able to raise similar funds by choosing to take out a loan secured on your property. There are risks and benefits to both a remortgage and a loan, so it’s important to make sure you know your options before applying.
What is the different between a remortgage and a loan?
- If you have equity in your home then remortgaging may be an option, but remember that borrowing in this way could cost you more once interest and the term of the loan is taken into account, especially if you are on a variable deal as interest rates are likely to rise in the future.
- Remortgaging is therefore a great option for borrowers not looking to take on additional debt in the form of a secured loan – instead, a remortgage could allow to access capital through a shifting of your existing mortgage debt.
- Can be either secured on unsecured. Secured loans, also known as personal loans, can be a suitable choice for borrowing smaller amounts. However, if you want to gain access to a lump sum that is comparable to what you might get with a remortgage, you will probably need to take out a secured loan, which allows you to borrow against your house.
- Could allow you to make payments over an extended period of time, which may be useful for budgeting.
- Does have the potential disadvantage of presenting a risk to your home, and should be carefully considered. Your house is secured on the loan; therefore you may lose your home if you cannot maintain your repayments. It’s vital to make certain that a secured loan is the right choice for you before embarking on with this sort of borrowing – speak to an independent financial adviser if you’re in any doubt regarding the appropriateness of this sort of loan for your circumstances.