Secured Loans 1st, 2nd & 3rd Charges also Unsecured Loans
What are secured loans?
Secured loans as the name say, “When you are asked (by the lender) to provide any sort of security before issuing a loan.” Once you keep any property as security, it becomes the lender's property irrespective of property's actual ownership. Be it a mortgaged property or owned outright; once pledged, the real owner surrenders his ownership until he pays the debt.
First Charge and Second Charge
First Charge – If you are pledging a property that you own, this is called the first charge secured loan.
Second charge – If you are pledging something that is already mortgaged, this would be known as the second charge.
How much can I borrow and over what term?
This sort of loans are available and the amount varies from person to person. The initial range starts from £1,000 and it can be anything up to £50,000. There could be a few lenders who can consider a loan up to £125,000 plus depend on upon a borrowers’ condition. The repayment terms are discussed in the beginning. In general, this repayment duration could be anything between three years to twenty-five years.
Please be advised, should you pay your loan amount before the agreed time, you will have to pay a penalty. Therefore, it is highly recommended that you must check the lender’s individual policy agreement; especially for this sort of clause.
Is there any variation in LTV for houses?
Yes. There is a variation in the LTV. If you are buying home to live, 100% LTV is available and in case, you want to rent the property, 85% is the maximum LTV available.
How will I be charged?
Check your agreement policy. In general, the lender does charge an interest on the borrowed amount; referred as APR. All three things; The amount you can borrow, the term available and the A.P.R, will be based on the equity you have in the said property. Actually, any lender will check your ability to repay the loan. He will closely look at your personal circumstances like credit history. Should your case seem strong to the lender, you can borrow up to 100% of the property value?
A general advice is – please compare the APR of different loans. By comparing you can judge, which one is competitive and how much. We at DM Financial Services have access to both the 2nd and 3rd charge lenders. Without worrying much about your credit history, give us a call, if you need a loan.