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Residential Mortgages
- Commercial Mortgages - Bridging
Loans - Secured Loans
Buy to Let Mortgages - Adverse
Credit Mortgages - Mortgage
Arrears
Secured Loans
A
secured loan is actually just a second mortgage and a second charge over
the home is taken. You cannot get a secured loan on a home or property
that is unencumbered; that does not have a mortgage on it. Below is a
list of the main secured loan points and then towards the bottom are some
specialist types of secured loan.
Secured Loan rather than remortgage - Your mortgage may have penalties if you were to remortgage so a secured loan avoids the need for this. It then may be an idea to remortgage when you are free to do so without penalty and consolidate the secured loan with a mortgage to give one overall payment.
If you have a mortgage with a high street lender and have built up some adverse credit a remortgage would mean that the whole debt would be affected by the current credit situation. Taking out a secured loan means that you only pay a premium on this part and the mortgage can stay at the prime rate.
The secured loan term does not have to mirror the term of the mortgage so if you want to borrow an amount of money that you can afford to repay at a faster rate than the mortgage you can!
Secured loans are generally provided at a higher interest rate than a mortgage. However it is generally accepted that the loan will be over a shorter term and will cost less than remortgaging and spreading the debt over a longer term.
Consent is usually required from the first mortgage company for a second charge. This is so the first lender can measure if you are borrowing responsibly. As an example, if you are struggling to make your mortgage payments how are you also going to be able to afford the secured loan payments? There are about 4 lenders that are prepared to provide a secured loan without consent for the second charge, they take an equitable charge over your home which does not give as much security but does stop you from being able to refinance your home poor sell it without the secured loan being repaid or at least without agreement from the secured loan company.
At the time of writing (Jan 2008) it is still possible to borrow more than the value of your home when adding your mortgage balance to the size of the secured loan whereas a remortgage would usually only allow you to raise 90% of the value of your home.
If your mortgage is with a non-conforming lender you may not be able to borrow as much as if you are with a high street lender and if you are in arrears with your mortgage with a non-conforming lender the overall loan to value will be capped at a very low level.
Below are some of the most common types of secured loan types, you can click on the heading of each for more information.
Full Status Prime Secured Loan - This means that the client can prove their income and they have a clean credit rating. Click header for more info.
Prime Secured Loan - The client has a clean credit rating and should qualify for the most competitive products and loans.
Full Status Secured Loan - This could be on a prime or sub prime basis. It means the client can prove their income so self certification of income is not required which is usually at a premium.
Sub Prime Secured Loan - This means the client has adverse credit such as missed mortgage payments, county court judgements, defaults, Individual Voluntary Arrangements or a previous bankruptcy.
Adverse Credit Secured Loan - This is the same as above, the client may have missed mortgage payments, county court judgements, defaults, Individual Voluntary Arrangements or a previous bankruptcy.
Bad Credit Secured Loan - This is the same as above, the client may have missed mortgage payments, county court judgements, defaults, Individual Voluntary Arrangements or a previous bankruptcy.
Homeowner Loan - This is another definition of a secured loan.
Secured Loan Setup Costs and Fees - Click on this header for a list of possible costs and fees.
Secured Loan Regulation - At this moment in time (Jan 2008) loans for less than £25,001 are regulated by the Consumer Credit Act and have a level of protection. Click on the heading for the pitfalls and advantages of both types of loan.
How to get a Fast Secured Loan - If you want the loan to complete quickly here are some tips on how to speed up the completion of your loan.
If you would like to view a list of the most common phrases entered into search engines for people searching for secured loans, please click here.
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