Why secured loans are more popular than mortgage extensions?
A new study has discovered that over 55% of homeowners would prefer to secure a loan against the value of their property, opposed to extending their mortgage agreement.
The reasons as to why consumers would prefer this option vary, however many experts believe that the popularity of secured loans can be rooted to their unique features. The first and most obvious benefit of a secured loan is the ability for consumers to attain competitive rates, regardless of their credit history. Secured loans also allow consumers the flexibility to borrow more, and repay the funds back over longer periods of time.
One of the UK’s leading broker associations (the AFB) has recently reported an influx in the number mortgage intermediaries actively recommending secured loans as an alternative to mortgage extensions. In some instances (circumstances permitting) a secured loan can be slightly more beneficial that a mortgage extension or a re-mortgage due to the sensitive nature of certain agreements. However, all homeowners cannot attain secured loans, as certain lenders will prohibit this action as part of their original mortgage agreement.
It has also been reported that men tend to favour secured loans over all other types of credit. Women on the other hand, are more inclined to use credit cards or unsecured loans.
