A secured homeowner loan is, as its name implies, a loan secured against your property. Secured homeowner loans require no upfront survey, legal or other fees. The loan can be used for many purposes, including paying off outstanding loans or credit cards and reducing your monthly repayments. Also, the loan can be used for home improvements, a new car, a wedding, a holiday or to inject cash into your business.
There are a number of specialist lenders willing to advance finance secured by way of a second charge against the your property over a term of between 5 and 25 years. In general terms, the maximum combined loan-to-value (LTV) of the existing mortgage, plus the proposed additional secured loan, should not exceed 90%. In fact, some lenders will restrict the maximum LTV to 80% if for business use.
As the finance lender would be second in the queue for security, this involves a slightly higher risk which means that a higher interest rate would be levied, the interest rate depending upon the applicant’s credit history. Although secured homeowner loans might be more expensive in terms of the interest charged in some cases, the following advantages may apply.
When considering applying for a secured homeowner loan, it is wide to consult with a professional loan broker who will search the market and source the best secured loan for you from a wide panel of lenders.