These are a way of obtaining equity out of your property whether it is your main residence or a property you rent i.e. a buy to let.
Rates are very lowat present, so if you are a person who is still tied into your current mortgage whether fixed or tracker then there is a way of obtaining more money for a new kitchen or bathroom, extension or loft conversion etc.
What many people do is take a secured loan and remortgage the whole lot back into one mortgage when their current deal has no more tie ins.
Of course, if you do take a secured loan there is no guarantee that you will be able to re-mortgage the whole lot so please be careful and best to Get in Touch before you take a secured loan.
TIP: The first port of call for you should be to contact your existing mortgage company to try to obtain a “Further Advance” (get more money) as the rates and fees are normally lower but if not then try a secured loan. If not Get in Touch and we will be glad to help
Secured Loans Q&As
If the remortgage lender is offering a better rate than the secured loan it may be more financially viable to remrotgage and include your normal mortgage and your secured loan as well.
Also, a point to make is that the lender you are remortgaging with says you can keep the secured loan where it is they must give permission to that lender for it to be there and they will contact the secured lender to say this. This should not cause any issues though.
I would seek independent financial advice from our experts to be sure this is the correct thing to do.
You will still need to prove your income and provide bank statements, so they are as easy to get as a mortgage. You still must prove you can afford the loan you want to borrow.
Secured loans can be used for many different purposes, including home improvements, debt consolidation or to buy a new car.
As the loan is secured against your home, it gives lenders an extra level of security. As a result, these loans are usually for larger amounts of money, the rates are usually lower, and you can borrow the money for longer, compared to other loans.
Please be aware, it may take you longer to repay what you owe, so you may pay more interest overall.