Secured loans for Homeowners with Bad Credit

News from Ravenwood – New 2nd charge lender as of 1st June 2018 for Bad Credit Secured Loans

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, Precise and Clearly for many borrowers looking for Bad credit secured loans.  The lender accepts applications for light adverse and heavy adverse cases.

Funds are limited please inquire today!

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Here are some Illustrations of poor credit secured loan cases done in 2018

Credit Card Debt Consolidation

Mrs H ran up credit cards helping out her sister during her sisters divorce. She ended up with minimum payments on cards of around £500 a month. She also had a store card with quite high interest.  Because all her credit cards minimum payments were fragmented across different times of the month, sometimes she missed payments or made payments late.  £12 fees were mounting up.  Some months she had one £12 fee for missing the minimum payment and another for going over the credit limit!  He credit history was a bit damaged.  She borrowed £25,000 with a bad credit secured loan and paid off all her credit cards and store cards.  She then just had one secured loan payment by direct debit on the same day as her mortgage came out.  The chaos in her life switched off over night.

Here is the before and after:

Before secured loan

Home valuation £300,000
Mortgage outstanding £105,000
Mortgage rate 2.78%
Mortgage monthly payments £486
Remaining mortgage term 21 years
Unsecured debt monthly servicing £488
Home LTV 35%

Total monthly payments £974

After bad credit homeowner loan

Home valuation £300,000
Mortgage outstanding £105,000
Mortgage rate 2.78%
Mortgage monthly payments £486
Remaining mortgage term 21 years
Secured loan rate 4.2%
Secured loan payment £149
Secured loan amount £25,000
Home LTV 43.33%

New total monthly payments £635

Saving in monthly payments after 2nd Mortgage £339

Mrs H had good income and could easy afford the £149 a month payment and she was much better off.  And nearly as importantly to her she didn’t get calls from credit cards nagging her all the time, her life was completely de cluttered.  Secured loans for poor credit was an excellent option for Mrs H debt consolidation.

Raising money for a distressed purchase of an Investment Property – homeowner loans for poor credit

Mr C had a friend who had been made redundant and had mortgage arrears. He agreed to buy his friends London flat a little under market value at £500,000. He wanted to get a 70% LTV (loan to value) but to let mortgage and put the property his company’s name. Problem was he only had £55,000 in savings and needed to find £95,000 to loan to his company for the deposit.

Mr C also had a small default on his credit file from an unpaid water bill due to a nightmare previous tenant in one of his rental properties. Mr C needed the £95000 quickly. Mr C had an excellent mortgage on his own home worth £610,000 from HSBC of £295,000. The mortgage was bank base rate plus 0.5% so he could not remortgage. As he had a lot of personal income he could prove he was able to get a secured loan of £95,000 and loan the money to his company to buy his friends flat.

The secured loan on his home completed quicker than the Buy to Let mortgage on the flat so everything was done in good time.

Purchase of house near sons new university and poor credit secured loans solution

Mr and Mrs S son got excellent A level results. He chose a 4-year course in an area he liked. After studying the costs of rentals, Mr and Mrs S looked at buying a buy to let property for their son to live in, where he could let out rooms to other students. They found a 3-bed house for £155,000 near the university. They looked at a Buy to Let Mortgage from the Leeds Building Society.

Here is the breakdown of the Purchase Buy to Let Mortgage:

Representative example: A mortgage of £108,500 payable over 25 years on our tracker rate for the mortgage term of 62 months at 1.7% above the Base Rate and then on our current variable rate of 5.99% (variable) for the remaining 238 months would require 62 monthly payments of £470.52 and 238 monthly payments of £651.99. The total amount payable would be £186,593.00 made up of the loan amount plus interest (£75,845.00). The overall cost for comparison is 4.7% APRC representative.

The 5-year term suited Mr and Mrs S as this would get their son through university and placement year and would give him an option to get a job in the same area and stay in the house after his graduation.

The problem was Mr and Mrs S didn’t have the £46,500 that the lender needed for the 30% deposit to get the good mortgage deal. They needed £30,000 from somewhere. As their family home was worth £450,000 and only had a small mortgage of £127,000 they had a lot of equity. As Mrs S had been back at work for several years, her income was good as well as Mr S income being strong too. So, Mr and Mrs S could keep the mortgage they got back in 2005, they worked out that they could get a poor credit secured loan from Paragon.

Here is the breakdown of the 2nd Mortgage on the family home:

Homeowner Loan: An assumed borrowing of £30,000 over 15 years, representative 3.9% APRC. Total amount payable: £39,641.02. Includes interest of £8,896.02. Repayments: 180 monthly repayments of £216.09 at 3.61% (variable).

The total monthly repayments of around £686.61 were not that high after the rent from the other bedrooms and the money they saved through not paying rent for their son.   Even in the event of interest rates going up significantly, Mr and Mrs S could still make the payments out of pocket if necessary so the risk to them was minimal.

 


What are bad credit homeowner 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 homeowners with excellent payment history up to £25,000
  • Secured loans can be accessible to people with some adverse history from a few thousand to hundreds of thousands.

Why would I get a no broker fee 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 for Bad credit UK vs  Adverse remortgage UK 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:

  • It is a meager 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 reasonable length of the remaining term
  • Its the type of mortgage which you could no longer qualify for because your circumstances have changed
  • It is essential 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 applicable when the amount of money you borrow is significant 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 an adverse 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
  • It is 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 the divorce settlement for example)
  • The value of the house has appreciated significantly enabling you to access more competitive lenders

Funds are limited please inquire today!

  • Details of your property

  • About You

  • By clicking Submit and ticking the box above you agree to be contacted by email or telephone by an FCA authorised mortgage firm and confirm that you have read and agreed to our Terms & Conditions and our Privacy Policy

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 high borrowing and pay the money back over a longer term that can even be matched to the remaining 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 homeowners’ equity reappear so secured loans are easier to qualify for.

2018 2nd charge secured lending

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 “haircut” 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
  • Precise
  • 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 Heavy 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

We have other broker only lenders not listed here with some great rates and terms.

Secured loan rates UK

Depending on how much adverse credit history you have and how recent it is, secured loan rates in the UK can range from a percent or so away from a good mortgage rate to 12% or more.  Lending to people with severely impaired credit histories likely involves a high degree of costs for the lender.  For example, a poor credit lender may have to have a big team of staff making out going phone calls chasing people for late payments, where a prime lender would likely have a very small team of chasers as most people with good history don’t need continual chasing to make a timely payment.

 

Average rating:  
 7 reviews
by Mr and Mrs Beaufort on Ravenwood Services
Helpful staff

We got a 2nd mortgage with Ravenwood at a rate much better than others we spoke to.

by Happy Customer on Ravenwood Services
Completly different to others

Refreshingly polite, honest and professional people that work at Raven. If I could give 6 stars I would.

by Tracy on Ravenwood Services
Raven wood helped me after others were a nightmare

I spent a lot of April having my time wasted by secured loan brokers. The all wanted fees that were very high. They would explain to me, ahh well its your bad credit you see that's why their is a fee. Raven wood were completely different and didn't take a big bite out of my home!

by MR and MRS Walters on Ravenwood Services
My bank rejected me...

But Ravenwood could help me.

by James K on Ravenwood Services
2nd loan on house

Keeping our existing mortgage and getting a secured loan saved us a lot of money as we were interest only on our mortgage.

Thanks James!

by William on Ravenwood Services
Got a secured loan quick

Ravenwood spoke direct to the lender for me and got them to agree to something they don't usually do for people. They are great!

Bad credit was not so bad!

Ravenwood negotiated for me with the lender to get me a slightly higher loan to value than they would usually accept with my level of bad credit.