Secured Homeowner Loans and Second Charge Mortgages
With UK borrowing restrictions now tighter than ever, many applicants experience tremendous difficulty in terms of being
approved for unsecured personal credit. However, if you are a homeowner and you are looking to borrow a substantial
amount of money, from £25,000 upwards, there is a far cheaper alternative offering improved repayment flexibility and
much higher rates of approval, even if your credit rating has let you down in the past.
Secured homeowner loans, which are sometimes known as second charge mortgages
, are long-term borrowing products that are
secured against a homeowner’s property. If you own the property outright, you can typically borrow anywhere up to 80% of
the open market value of your home, provided you are willing to risk your home on the off chance that you will be unable
to make the repayments at some point in the future. If the property is already mortgaged, your homeowner loan
secured on a second charge basis against any remaining equity once the outstanding mortgage amount has been subtracted
from the value of your property.
Although there will always be some level of risk involved, there are a number of actions you can take to reduce this
chances of this happening. First of all, always make sure that you borrow responsibly and within your means. You should
never take out a secured loan
that you cannot realistically afford to pay back and a responsible lender will always
check to ensure you can afford to pay back what you borrow as part of the application process itself. Secondly, there
are a number of payment protection plans available that can be added to your loan product as insurance against ill
health, loss of employment and death.