Secured loan Mortgage Advice in Nottingham

Secured Loans, also known as a Second Charge Mortgage, are used only as a last resort. They tend to be applied for by applicants who, for some reason, cannot or choose not to apply for a normal First Charge Mortgage. Now Secured loans are far more common as the rates on offer are much lower than previously available.

What are my options?

When it comes to raising additional funds against your property, there are three main options:

  1. A further advance from your current lender.
  2. Remortgage to a new Lender.
  3. Second Charge mortgage.

If you only want to borrow a low amount, unsecured loans can also be an option. If you choose to opt-in for a second mortgage, your current existing mortgage will stay in place as it is now with your current lender, and the extra funds will be with a different provider.

The second mortgage acts on a different rate of interest with separate direct debit. Some people choose to run their second charge loan over the same term as their primary mortgage to keep the payments low.

Raising additional funds

There are lots of different reasons that people raise additional funds secured against their property, such as:

  • Home improvements.
  • Debt consolidation.
  • Looking at purchasing cars or other vehicles.
  • You are paying for a wedding/honeymoon/special anniversary/holiday.
  • You are injecting cash into businesses.
  • I am paying for school fees.
  • I am paying tax bills.
  • Cosmetic surgery.

Why not just advance or remortgage?

Here are some typical reasons why a Second Charge Mortgage may be more suitable than a Further Advance or Remortgage:

  • Looking to retain your current mortgage if it has a low-interest rate.
  • chosen to maintain your existing mortgage because it’s interesting only and you prefer to keep it that way.
  • You went self employed in Nottingham since you took out the original mortgage.
  • Your income is derived from multiple sources.
  • Maybe you have a poor credit score, or you want to avoid a remortgage in Nottingham due to substantial redemption penalties on your current deal.
  • Need to raise funds very quickly.
  • You are looking to raise capital against your UK property to purchase foreign property.
  • Prefer to avoid all upfront setting up costs.
  • Your current mortgage lender has declined your further advance application.
  • Wanting to raise funds to pay a tax bill.
  • You want to raise funds to purchase another property which isn’t currently suitable for a mortgage (non-standard construction/property in poor repair).
  • To inject cash into a business.
  • You need capital to pay business tax liabilities or to clear a business overdraft.

Applying for a Secured Loan in Nottingham

When dealing with a Mortgage Broker in Nottingham, a broker fee and an additional arrangement fee usually are payable, and you can choose to pay upfront or elect to add onto the loan.

However, bear in mind that adding additional costs to the mortgage would mean you pay extra interest. Meaning you will be paying back more interest if you extend the term of any debts you are considering consolidating.

If you are securing debts that are currently unsecured, you are putting your home at risk if you do not keep up the repayments, speak to a Mortgage Advisor in Nottingham today for further information.

Date Last Edited: September 16, 2024