Sucured Loans on your property

The crux of any loan is that the lender wants re assurance that you have the ability to pay the funds back on time and to the agreed schedule. That is not an unreasonable clause, but one which way too many fail to do in today’s ‘must have’ society. There are unsecured loans and there are secured loans, which each have their advantages. There is no doubt that the secured loan is the better deal as it is cheaper on interest rates and can often be over a longer term of repayments. The meaning of a secured loan is that the money is released on the basis that a property is put forward as collateral (security). So in short, if the borrower defaults on the loan, then the lender has the right to claim the full loan amount back – even if that means the sale of the property to raise the money. That is a prospect which some are not willing to consider so they go for an unsecured loan which is simply an amount based on employment, income and expenditure.

The secured loan is great for those who are in steady jobs, and have a good solid income with plenty to spare every month. The loan company, and that can be a bank, a building society or a private financial company will be pleased to lend against a property which is known to have a high value, with a low mortgage. That’s the ideal situation, so the couple who are earning £50,000 per annum, have put a big deposit on their house and have a £80,000 mortgage are in the perfect position to get a secured loan. The loans can be arranged online and can be completed quickly once all the details on the property and income are completed.

That can take some time if the lender is not the building society which holds the mortgage, but if that is the case, then the process is exceptionally quick. They will already know you, your credit history and the house value so there are few questions to answer. If it is an outside party, they may want an assessment of the value of the house by their own surveyor and that report does take some time. As long as the surveyors assessment matches that of your valuation then again, the process is quick.

The only other aspect which has to be completed in an online application is the credit check and the company will do a standard credit score which comes from one of the specialist firms dealing in credit history. If there have been previous defaults on loans that goes against you, even if you are now earning a stack of money and the default was when you were broke. Unfortunately that sticks with you for six years, and can have a negative effect on an online secured loan application.

The purpose of a secured loan is not something which really concerns the lender. A building society might be well pleased to hear that the loan is for an extension to the property which will add value, and they will almost certainly be willing to either give a further advance on the existing mortgage or a secured loan. The further advance is often a good option as it requires little new paperwork and simply provides extra cash over the initial mortgage. It's also a cheap way to borrow and can be paid back over the same period as the mortgage. Sometimes the extra amount is barely noticeable on the monthly payments.

So there are lots of ways to get extra money for the big house project, the new car, boat or anything which is going to take out a large amount from the savings pot. The importance of paying the loan back is something which has to be considered in every case, and there are now cooling off periods for the borrower to consider the situation carefully. This was a rule brought in by the Financial Services Authority to curb buyers of loans from rushing into any kind of deal without due consideration. The agents selling the loans now have to offer that cooling off period and if they don’t then there is something suspect about the loan company. In essence the best deal is going to be that from your own building society followed by the banks and then the financial company. Family concerns are always paramount on the list of home priorities, so the secured loan has to be thought through and every worse case scenario looked at. Remember the house is the family home and losing it would have a dreadful effect on everyone.