Secured Loan, homeowner loan, or to give it its official title, second charge mortgage used to be known as last-resort lending.
They tend to be applied for by applicants who, for some reason, cannot or choose not to apply for a normal first-charge mortgage.
Secured loans are far more popular now as the rates on offer are much lower than previously available.
Before taking out a secured loan, it’s worth considering alternative options. For smaller amounts of borrowing, unsecured loans are also an option.
If you decide a secured loan is the way to go, it’s important to consider how affordable the loan repayments will be.
The three main options when looking at raising additional funds for your home are:
If you opt for a second charge mortgage your existing mortgage with your current Lender will stay in place the same as it is now. The extra funds will be with a different provider.
The second mortgage will be on a different rate of interest with a different direct debit. Some people run their second-charge loan over the same term as their main mortgage in order to keep repayments low.
There are lots of different reasons why people look to raise additional funds secured against their property. These could be for:
There are some typical reasons why a second charge mortgage may be more suitable than a further advance or remortgage advice in Leicester, you may:
When applying for a secured loan, a broker fee and a lender arrangement fee are normally payable and these can be paid upfront or you can elect to add them to the loan.
Please be aware that if you do add fees to the mortgage you will pay additional interest. You will also end up paying more interest back if you extend the term of any debts you are considering consolidating.
If you are securing debts that are currently unsecured you are putting your home at risk if you do not keep up the repayments.
Date last edited 24/04/2020