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Secured Homeowner Loans and Second Charge Mortgages
With UK borrowing restrictions now tighter than ever, many applicants experience tremendous difficulty in terms of being approved for unsecured personal credit. However, if you are a homeowner and you are looking to borrow a substantial amount of money, from £25,000 upwards, there is a far cheaper alternative offering improved repayment flexibility and much higher rates of approval, even if your credit rating has let you down in the past.
Secured homeowner loans, which are sometimes known as second charge mortgages, are long-term borrowing products that are secured against a homeowner’s property. If you own the property outright, you can typically borrow anywhere up to 80% of the open market value of your home, provided you are willing to risk your home on the off chance that you will be unable to make the repayments at some point in the future. If the property is already mortgaged, your homeowner loan will be secured on a second charge basis against any remaining equity once the outstanding mortgage amount has been subtracted from the value of your property.
Although there will always be some level of risk involved, there are a number of actions you can take to reduce this chances of this happening. First of all, always make sure that you borrow responsibly and within your means. You should never take out a secured loan that you cannot realistically afford to pay back and a responsible lender will always check to ensure you can afford to pay back what you borrow as part of the application process itself. Secondly, there are a number of payment protection plans available that can be added to your loan product as insurance against ill health, loss of employment and death.
When To Consider a Secured Loan
If you live in a mortgaged property that you own and you are looking to borrow a substantial sum of money, in the region of £25,000 to £250,000, you might be able to gain access these funds by remortgaging or switching providers. However, you might already have an affordable mortgage product with low repayments in place, which would make this an impractical option from the start. Additionally, some residential mortgages have hefty exit fees and early repayment charges and in situations such as this, many people prefer to take out a second charge mortgage or secured homeowner loan instead.
A homeowner loan is an affordable borrowing product that can be used for a large number of helpful reasons. Popular uses include home improvement (which can add serious additional value to your property), debt consolidation (lowering your monthly outgoings and improving your finances), and covering the cost of purchasing a new family car, paying for a holiday or financing a wedding. As long as you have sufficient equity in your property, a secured homeowner loan is one of the cheapest types of finance available and the repayment terms can be structured to fit your personal finances flawlessly. Unlike personal loans, which are only available to those with a good credit rating, homeowner loans are suitable for all manner of applicants including self-employed (with no proof of income) and even those with CCJs.
For more information about secured homeowner loans, second charge mortgages or any other type of property finance, call now and speak to one of our FCA authorised borrowing experts. With a choice of over 100 lending facilities and access to dozens of different loan products, we will find you the most competitive borrowing option with the lowest rates and costs.