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.
When it comes to raising additional funds against your property, there are three main options:
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.
There are lots of different reasons that people raise additional funds secured against their property, such as:
Here are some typical reasons why a Second Charge Mortgage may be more suitable than a Further Advance or Remortgage:
When dealing with a Mortgage Broker in Leeds, 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 Leeds today for further information.