Secured Loans

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Secured loans today are a great solution for someone that wants to keep their existing mortgage but needs to raise money.

Here are so great reasons you might want a secured loan rather than a remortgage:

  • Existing first charge mortgage is a very good rate not available today from any lender
  • Existing first charge mortgage is interest only when most lenders won’t offer interest only any more
  • Existing first charge mortgage has a redemption penalty that is too high that would need to be paid
  • You don’t meet the criteria for a competitive first charge lender re-mortgage
  • Their is an upper limit to what you can borrow on an unsecured loan
  • You can take out a secured loan over a longer term usually than an unsecured loan, often matched to the remainder of the term of your existing mortgage
  • The interest rates on a secured loan are likely to be lower than on an unsecured loan
  • It maybe your only option if you have bad credit.  Many competitive unsecured loan lenders will exclude people with bad credit or even a couple of late payments

Some buy to let landlords can get secured loans too, theses are sometimes called Landlord loans.

Potential Brexit effect on UK 2nd charge lending

Its most likely that all but the hardest forms of brexit have absolutely no impact on secured loans. Here are some bullet points:

  • If Brexit has a negative effect and house prices reduce or have the potential to reduce this will make 2nd charge lenders more cautious at the higher loan to value end of the market
  • If a weakened pound causes inflation to rise, interest rates will have to risk, putting pressure on peoples affordability
  • Any sort of risk or volatility in interests rates or the pound sterling could discourage the flow of foreign capital into the UK
  • If brexit causes a recession/job losses and arrears in lending increase some lenders may exit the market completely