Secured loans for Home Owners with Bad Credit

News from Ravenwood – New 2nd charge lender as of 1st April 2017

Modern flats will value up well

Flats in Torquay

We have an agreement with a new lender offering better rates and terms than Equifinance, Together and Clearly for many borrowers.  The lender accepts applications for light adverse and heavy adverse cases.

Funds are limited please inquire today!

  • Details of your property

  • About You

What are secured loans?

Secured loans are only available to property owners/mortgage holders where the lender can forcibly sell your home to get its money back if you can’t repay.

They are usually used where the size of the loan is not appropriate for a lender on an unsecured basis.

  • Unsecured loans available to home owners with excellent payment history up to £25,000
  • Secured loans can be available to people with some adverse history from a few thousand to hundreds of thousands.

Why would I get a Secured Loan?

With a secured loan you are usually given a longer term.  Sometimes as long as the remaining term of your existing mortgage.

To save money each month you can secure your borrowing for debt consolidation.

Secured Loans vs Bad credit remortgage questions

Examples of scenarios where a secured loan would be better than a remortgage with bad credit.  

Firstly types of 1st charge mortgage you already have:

  • Its a very low variable rate which is good when bank base rates are so low
  • Its interest only and therefore has a lower monthly payment impacting your overall affordability
  • It has a redemption penalty
  • It has a competitive fixed rate with a good length of remaining term
  • Its the type of mortgage which you could no longer qualify for because your circumstances have changed
  • Its important to pay your first charge borrowing first, if your mortgage payment is low you can fight off repossession for a while by prioritising the 1st charge lender over the 2nd charge lender

Secured loans are generally applicable when the amount of money you borrow is large and the term is much longer than say that of a personal loan or car finance.

Examples of 1st charge mortgages you may already have where a bad credit remortgage may be better

  • Its an expensive rate and you can qualify for a better lender with a lower rate (improvement in personal income, time out of credit problems etc.)
  • Its fixed term discount rate has ended
  • It no longer has a redemption penalty
  • Its a term that doesn’t suit your needs (too short).
  • A 3rd party like ex partner may be on the mortgage and you have to remove them (part of divorce settlement for example)
  • The value of the house has appreciated significantly enabling you to access more competitive lenders
  • Details of your property

  • About You

Signing away your home to a lender is not something you should do lightly as in certain circumstances it limits your options. However offering the lender collateral can allow you to access funds at a competitive rate even if you have some poor credit history.

Some people can have all their disposable income taken up with debt service to multiple lenders.  Credit cards, store cards, catalogue accounts and even other high interest loans can consume all your income, making you a “debt slave”.

With a secured loan you can use this money to clear expensive borrowing and pay the money back over a longer term that can even be matched to the reminding term of your mortgage.

Also if you have an existing mortgage from a pre credit crisis lender this mortgage is likely worth keeping and a re-mortgage could be a bad idea.

House prices in the UK are recovering nicely, even outside London many areas in the United Kingdom are back above the 2007 September highs.  This has made the home owners’ equity re appear so secured loans are easier to qualify for.

2017 Secured lending regulations

Today’s regulations make it difficult for you to get a loan you don’t have the ability to service, so if you have a lot of unsecured debt you can’t realistically service you might be better off doing debt management and hitting your unsecured creditors with a “hair cut” on their principal.

Prime lenders include

  • Capital One
  • Santander
  • Lloyds
  • HSBC
  • Barclays

Adverse 2nd charge lenders include

  • Norton Finance
  • Equi Finance
  • Spring Finance
  • Masthaven
  • Central Trust
  • 1st Shop Home Loans High LTV
  • Together
  • Evolution Money
  • Opal homeowner
  • Paragon personal finance
  • United Trust Bank
  • Shawbrook
  • Clearly Loans
  • Stepone Finance

Examples

Together Light Adverse Secured Loan

  1. Max LTV 75%
  2. Amount £3000 to £50000
  3. Rate 7.67%
  4. Term 3 to 30 Years

Equifinance Adverse Secured Loan

  1. Max LTV 70%
  2. Amount £50,001 to £100,000
  3. Rate 13.49% p.a
  4. Term 3 to 25 years