A UK secured loan is a loan which is secured against an asset, such as equity in your property or some other appreciating asset, in order to cover the extra loan value. The UK secured loan contract effectively gives the lender the right to recover the loan amount by requiring the asset against which the loan was secured to be sold, if the borrower defaults on their repayments. If you use your property to borrow against, as the secured loan asset, then you will have two lenders with an interest in your property, namely your mortgage lender and the secured loan lender.
Some lenders will offer to lend money secured against an asset which is not your property, but this asset has to have the capability of maintaining or increasing it's value. An example might be a portfolio of stocks and shares. In this case the lender would value the portfolio and the risk that the portfolio equity might fall in value, and then determine how much money they would be prepared to lend secured against the portfolio value.
So if you want to borrow money for home improvements, buying a car etc., how do you know whether you should re-mortgage your UK property, or just take out a UK secured loan on your property or other asset to borrow the money?
Well it all depends on how much it's going to cost you. For example, if your current UK mortgage is already on a very good interest rate which is unlikely to rise in the next few years (a fixed or capped mortgage for example), it may actually cost you more if you re-mortgage rather than take an additional UK secure loan against the property. You will have exit charges from your current mortgage, arrangement fees for the new mortgage and the interest rate for the larger loan amount may be at less favourable rates than your current mortgage. In this case it would make sense to leave your current mortgage alone and borrow using a UK secured loan borrowed against the equity in your property.
However, if your current mortgage is on a non-competitive standard variable interest rate for example, and you've had the mortgage long enough to get past the period of punitive exit charges, it may well be cheaper to borrow money by re-mortgaging to use property equity and at the same time find a more competitive mortgage lending rate.
You can find more information about the UK secured loan, by calling our loans adviser now. Alternatively just fill in our online remortgage enquiry form, or just give us a call on the telephone number above, and if our mortgage adviser calculates that you would be better off with a UK secured loan, he will offer it as an alternative to a remortgage.
Whatever size loan you need to borrow, Better-Mortgages co uk Ltd an independent mortgage, loan, and insurance adviser, can arrange a UK secured loan, a re-mortgage, or a UK unsecured loan to suite your borrowing requirements, using one of our competitive lenders. Just call us on the number above to discuss your requirements and find a UK secured loan with help from a Better-Mortgages Loan Adviser.
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