A few years ago it was quite easy to arrange a secured loan or remortgtage even if the credit rating of the applicant was bad.
In the past even people with bad credit profiles could obtain remortgages and secured loans at 75% LTV.
Firstly to explain what is meant by equity. Equity is the difference between the value of a property and the balance outstanding on the mortgage.
This means that if a property is valued at £300,000, and the mortgage secured on it is £100,000, the equity is £200,000.
Remortgages and secured loans at 75% loan to value based on the above example would mean that 25% of the property value must be deducted and what remains would leave the maximum remortgage or secured loan available.
The maximum remortgage available would therefore be £225,000 and the maximum secured loan would be £100,000 as that is the maximum secured loan that can be advanced.
In the past even homeowners with very poor credit ratings were eligible for such bad credit secured loans and remortgages.
Even those on the verge of repossession could have their property remortgaged at the last moment just as they were about to be rendered homeless.
It was of course this reckless lending that helped lead to the credit crunch.
Now many people think that secured loans and remortgages are completely unavailable to those with a poor credit rating when this is indeed not the case.
Bad credit home loans are still out there although at much stricter criteria and equity margins than in the past.
Unsecured loans for people with a poor credit history are totally unavailable in these credit crisis hit days and for tenants who are in need of a loan the painful truth of the matter is that they are simply not going to be able to onbtain one at all.
For those who own their property there is help available in the form of bad credit rating loans and remortgages.
The equity margin is much tighter and as regards secured loans the maximum loan to value for a homeowner with minor adverse is 60% and for serious adverse credit the maximum LTV is 50%.
The maximum loan available is also limited to around the £25,000 mark, but this can nevertheless still be of help to a homeowner struggluing to keep his head above water.
Bad credit loans have fairly high rates of interest usually about 25%.
The homeowner can rearrange his finances a few years later and obtain a lower rate of interest as his credit rating will have improved.
Remortgages are still availble for bad credit file applicants, but the equity margin will be at 60% and the interest rate will be about 10% which is high but much lower than the high interest credit cards, personal loans, etc. that can be paid off with the remortgage.
For those who have financial problems remortgages and secured loans really can help.
Champion Finance are one of the longest established brokers in the whole of the UK.. Mortgages and are also available from the whole of the market as is debt help. Article Source: