A secured homeowner loan is, as its name implies, a loan secured against your property. Secured loans require no upfront survey, legal or other fees. The funds can be used for most 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 various specialist lenders willing to advance finance secured by way of a second charge against the your home over a term of between 5 and 25 years. Generally speaking, the maximum combined loan-to-value (LTV) of the existing mortgage, plus the proposed extra secured loan, should not exceed 90%. In fact, some lenders will restrict the maximum LTV to 80% if for business use.

As the 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 costly in terms of the interest charged in some cases, the following advantages may apply.

 

  • A secured loan may usually be raised much more quickly than finance using a remortgage. Whereas it might typically take three weeks to arrange finance via a secured loan, it usually takes at least six weeks to remortgage.
  • The applicant may be tied to a mortgage lender offering a low interest rate for say 3 or 5 years, which might involve early redemption charges if the mortgage is redeemed prematurely. In using a secured loan, the mortgage can remain in place to avoid this charge.
  • Whilst the applicant may have a 25 year mortgage, they may not wish to extend his business finance for such a long term, which would be the case if they remortgaged.
  • Finance raised via remortgaging cannot be offset against the future profits of a business for tax purposes. However, a separate secured loan can be clearly identified as being for business use and offset against tax accordingly.

    •  

    When thinking about 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.


    • Commercial Mortgages for UK Businesses - A commercial mortgage is similar to a residential mortgage in that funds can be borrowed over a long period of time, usually a maximum of 30 years, secured by a first charge on the property being bought. In taking first charge, the lender is first in the queue to recover any debt if the property ever ...
       
    • Make the Most Out of Homeowner Loans - Owning a home carries many advantages and if you do have one, you may benefit from homeowner loans and make them work for you. Loans can be utilized for a variety of purposes and are especially useful for purchasing other properties, buying a new car, financing home improvements or even consolidating bad debt. Just as ...
       
    • What Are The Benefits Of Using A Mortgage Broker ? - Mortgage brokers play a meaningful role in the process of applying for a mortgage loan. Mortgage brokers act as middlemen between you and the mortgage lender . Mortgage brokers obviously earn a commission for their efforts , but what are the advantages to you the applicant when applying for a mortgage loan. Mortgage brokers ...
       

    Google