HOMEOWNER LOANS

A secured loan is where you use your current property as security against the loan (also known as a home owner loan or second mortgage). The amount you will be eligible to borrow and the loans APR will depend on the value of your home, your current financial circumstances and your current annual income. It is important to remember that your home is used as security by the lender and if you default on your loan repayments, you will be in danger of losing your home. Secured loans range from £7,500 to £250,000 (different rules apply to loans over £25,000) and the maximum loan to value the lender may offer is 125% of the value of the property. Interest rates on secured loans are traditionally a little higher than standard mortgages.

Personal loans generally only allow you to borrow up to £25,000 while a secured loan allows you to borrow a much larger sum. If you are borrowing to consolidate debt, a secured loan could reduce your monthly outgoings because interest rates can be lower than a traditional personal loan. It is important to remember that the repayment term will be longer and therefore increase the overall amount payable.Secured Loans are in effect a second mortgage and are mainly used when there is a high, early redemption charge on the main mortgage and extra cash is required swiftly. Providing there is sufficient equity in the property, funds can be obtained within two weeks usually without incurring a valuation or legal cost to yourself. Repayment periods can be for almost any term; therefore the payments can be adjusted to suit your circumstances.

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