Secured Loans
Secured loans enable homeowners to borrow
capital against the value of their
property.
Anyone wishing to raise
additional capital who has sufficient equity in their property
could consider a re-mortgage, however this may not be possible
if penalties apply to the mortgage and so taking out a secured
loan could prove a viable alternative as the available equity
in the property can be used to guarantee the
loan.As with any loan secured on a property
consideration should be given to what would happen if the
repayments were not met. However secured loans do
have a number of distinct benefits over other types of
borrowing. One of these is that they usually offer
attractive interest rates when compared to unsecured
loans.
Secured loans also come with all sorts
of flexible repayment terms, these include: ‘payment
holidays' whereby you can halt repayments for an agreed
period of time in order to divert capital elsewhere (say
to help with the costs of a wedding or newborn child) and
favourable redemption charges – which is an important
consideration if you may want to pay the loan back
early.
Secured loans are typically spread over a much greater
timeframe (up to 25-30 years) than unsecured loans, and you can
borrow larger amounts.
Bridging Loans
Bridging Loans are short term loans. The
Bridging loan is designed to solve a temporary cash
shortfall that may arise when buying a property or
business.
A typical example of when you may need one would be if you want
to buy a second property before you've sold your first. A
Bridging Loan is normally secured by getting a mortgage on the
new property, and taking out a second mortgage on the property
being sold. In this case the loan will depend on a positive
valuation of the relevant properties.
Lenders will usually allow Bridging Loans of up to 65% of the
value of the properties - less any existing mortgage.
As they are more risky for the lender than the usual house
buyer's loan, bridging loans are more expensive and should only
be used where you are fairly certain to repay them within about
6 months, however it is often prudent to take advantage of a
bridging loan because it is short term and does "bridge" the
gap between selling and buying a home.
Our specialist advisers have the very latest information on
bridging loan rates and can source exceptional deals on your
behalf.
THINK CAREFULLY BEFORE SECURING OTHER
DEBTS AGAINST YOUR HOME. YOUR HOME IS AT RISK IF YOU DO
NOT KEEP UP REPAYMENTS ON YOUR
MORTGAGE.
| 