Secured loans
secured loans are for homeowners who are currently making regular mortgage payments. The loan is secured against the level of equity in a property. For example if your house is worth £250,000 and your mortgage is £150,000 you have £100,000 worth of equity in your house.
Secured loans are an attractive way to release the equity built up in your home because they are usually quicker to arrange and can sometimes offer low rates of interest because the loan is secured against your property. Lenders are happier to provide secured loans because in most cases they can recover the full loan amount if a customer defaults on their repayments.
You can use the finance raised from a secured loan for anything you like, because the money is yours! In the majority of applications people use the money for home improvements like a new extention, conservatories, kitchen or bathroom. These will often add value to a property further increasing the level of equity.
If you have a poor credit rating poor credit rating a secured loan may be a viable option for you simply because it is less of a risk to the lender. If you’ve had problems applying for an unsecured loan you could be eligible for a secured loan if you have equity in your property. You should however ask yourself why you’re unsecured loan application was refused in the first place. If it’s because you’ve missed payments in the past or have CCJ’s or defaults then a secured loan might not be a wise choice.
You’ll have seen the warnings on every web site and secured loan application secured loan application form; THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOANS SECURED AGAINST IT.
These warnings are not there for the sake of it! Industry experts are predicting 45,000 repossessions in 2008 so don’t be tempted by high street lenders or building societies offering low loan rates. Never take out a secured loan or mortgage unless you can comfortably afford the repayments.