"Secured loan or re-mortgage?"

You If you are looking for ways to raise a substantial amount of money on your property, then you will perhaps have already considered either taking out a secured loan, or re-mortgaging your property. In both instances, the loan will be secured against your home and in both cases, the lender will take a legal charge over your property and failure to keep up the repayments of the loan will result in your home being at risk. We would be delighted to help you make the decision between these two viable options but in the meantime, it is always good to know the benefits of each.

Secured loans may have been seen in the past as an expensive way of raising money, but competition in this area is now so intense with the new lenders coming on stream, that a secured loan may now be a client’s first choice. The secured loan market has changed dramatically for those clients who wish to make home improvements, buy a new car, consolidate debts, pay a tax bill, or raise money quickly for any legal purpose. Rather than being a fall back option for those previously declined from other credit avenues, secured loans are now being taken out by people with a healthy credit score simply because of the excellent secured loan products on the market and the speed at which clients can complete and drawdown on funds.

Re-mortgaging your property is the other option, when you wish to raise funds, but clients must of course be aware that there may be an exit penalty from their existing lender, particularly when you are still in an existing product for a given period of time.

Once you are out of the product period there are thousands of products on the market for you to consider, many of which have some extra features such as free legal’s, free valuation or a cash back on completion. You should however remember that there is no such thing as a free lunch, and any so called free giveaways will have an impact on the interest rate.

In this market today with interest rates at an all time low, a re-mortgage onto a long term fixed rate must be a very attractive option that will provide long security and peace of mind that the mortgage should always be affordable within the fixed rate period.

A secured loan is always a good option where a client wishes to raise money quickly, and they are locked into an existing mortgage with a high street lender on attractive terms, but due to circumstances beyond their control now have some adverse credit. A secured loan lender will take a view based on the equity in the property and the client will only pay the increased terms on the secured loan, not on the whole mortgage.

When the clients have recovered their credibility, they can then remortgage to amalgamate the two loans on improved terms.

When you are borrowing money secured against your property clients should always be aware that you could be putting your home at risk, and you should always make sure that you can service this debt and it is well within your budget and affordable. Lenders are very conscious of each mortgage being affordable and they will carry out their own stress test to make sure that you are not over stretching yourself.

If you would like any advice on either taking out a secured loan or re-mortgaging your home, we would be more than happy to go through your options with you. Call our lovely team on 03452 605506 to discuss!

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up with payments on your mortgage.