How To Get A Secured Loan
Also known as “second charge mortgages”, a secured loan is a loan that helps secure the property of your dreams, albeit with higher than standard interest rates.
In the event of a repossession, the provider of the secured loan must wait for the first provider to sell the property before their money is returned. Although often known as an expensive “pis aller”, they can often be incredibly helpful in regard to certain circumstances.
If you need to raise money against your property, there are 3 main
- Take out more money from your current lender
- Move to a new lender via Remortgage
- Take out a second charge mortgage (secured loan)
If you take out a secured loan, your mortgage stays exactly as is. The new amount is borrowed from a different provider and a separate direct debit.
The length of this new amount varies, as you could take it out over a shorter or longer-term than your main mortgage. If you’re only in need of a small amount, you may want to look at unsecured borrowing.
Some of the main reasons people take out additional borrowing are:
- Home improvements
- Debt consolidation
- Purchasing cars or other vehicles
- Paying for a wedding/honeymoon/special anniversary/holiday
- Injecting cash into businesses
- Paying for school fees
- Paying tax bills
- Cosmetic surgery
Reasons why a second charge mortgage may be the most suitable option:
- Your current mortgage rate is low or interest-free and you’d like to keep it
- You are recently Self Employed
- Your income comes from multiple sources
- Due to early repayment charges, you’re looking to stay away from Remortgaging
- You need to raise funds very quickly
- You are looking to raise capital against your UK property to purchase foreign property
- You’re raising funds for an un-mortgageable property
- Since you last took a mortgage your credit rating has dropped
- You need capital to pay business tax liabilities
- You’re looking to raise funds and would prefer a different lender
- Your current lender disallowed a further advance application
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