Second Mortgage Advice
What is a secured loan?
A secured loan is a loan secured on your home or investment property and is typically used for home improvements or consolidating other debt.
Because the loan is secured against property, pay rates are less expensive than those on an unsecured loan.
As an alternative to a secured loan, you may consider approaching your current mortgage lender to request that you top up your mortgage through a further advance.
This, however, is not always the best option and more is explained below.
Key secured loans deals
Are you on a low mortgage rate?
If you are one of those borrowers on a low standard variable rate or base rate tracker, you may find the rate you are paying is far too competitive for you to consider re-mortgaging elsewhere.
In these circumstances, a secured loan is ideal as it enables you to get the extra funding you need without affecting your current low rate.
Need money quickly?
Secured loans can be arranged very quickly (days rather than weeks for a standard mortgage) – very useful if you need money fast.
Are you on an interest only deal?
In the current market, if you are a borrower on an interest only deal and you wish to increase your borrowing, you may find that your lender will ask you to switch the mortgage to a capital repayment basis – this may not fit your cash flow requirements.
By taking a secured loan you can keep your current mortgage on its interest only basis to improve your cash flow.
Are you recently self-employed?
If you have recently become self-employed and do not have two years trading accounts to provide to a mortgage lender you will struggle to obtain a re-mortgage.
We have access to several secured loan offers where the lender will work off of projected figures or business bank statements to prove your income.
Do you have blemishes on your credit record?
If you have minor blemishes on your credit record that are stopping you passing credit score for a re-mortgage, a secured loan can help.
Secured loans are available for clients who had have last payments in the past 12 – 24 months.
Do you have an investment property on which you would like to raise money?
If you have a buy to let property, you may wish to release some equity and a secured loan can be ideal for that purpose.
What does a secured loan cost?
Pay rates in the current market start at around 4.9% and loans are available up to 95% loan to value.
Secured loan cost example
A £20,000 secured loan payable over 15 years with a pay rate of 5.5% will cost just £38 a week.
You can borrow as little as £10,000 or as much as £2.5 million.
Secured loans lenders are more flexible on why they lend
secured loans can be accepted for all of the reasons listed below:
- to settle a tax bill
- to expand a property portfolio
- to expand a business
- to buy into a business
- to settle a bridging loan
- to pay school or university fees
- to settle an IVA or debt management plan
- to purchase a holiday home
- to purchase a boat or caravan
- to provide a gift
- to extend the lease
It is easier to get a ‘yes’ with secured loans
secured loan lenders are more flexible and can consider
- recent mortgage arrears
- smaller value properties
- income from the older applicant
- high levels of adverse credit
- short time employed
- short time self-employed
- bonus income
- benefit income
- rental income
- higher loan to values
- unusual properties
- projected self-employed income
- accountant not qualified
Plus secured loan lending can be with you – fast.