Secured loans which are also called homeowners loans need the security of an asset.

The asset required is the security of a property

Secured loans and their close relative, remortgages do not come only in one form but several including both private and business.

Loans for cars, motor homes, etc. are actually secured loans and the vehicle itself i forms the security for the loan.

Because these loans are secured ones, the lender is in the position of being able to take back the car, etc. if a number of repayments are missed.

Many do not understand it, but even loans used for home improvements are secured on the new conservatory, garden room etc.

In theory the loan lender can take back the kitchen, etc. but this would cause so much damage that it would hardly be worth his time. Therefore the borrower will usually be left with the goods.

Another form of secured loans are commercial ones that must be secured on business property. These can raise additional funds to improve the business, and it’s profitability.

However when the word, a secured loan is heard, what comes most readily into a person’s head is residential secured loan that are secured on private property.

Remortgages are also secured products that require, just as secured loans do, to be secured against the equity in a property.

Remortgages and secured loans need the property to have sufficient equity and what equity in fact is is the figure that remains when the mortgage balance is deducted from what the house or whatever is worth.

For example , if a property is worth 260,000 and the mortgage balance is 180,000 the equity is 80,000. On the other hand if a property is worth 260,000 and the mortgage also stands at 260,000 there is no equity, and it would not be possible to obtain either a remortgage or a secured loan.

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