Need To Raise Capital? What About Secured Loans?

Monday, June 26th, 2017

Since secured loans, or second charge mortgages to give them their correct title, have been brought under the same regulatory framework as mortgages, the debate has been ongoing as to whether people who are raising capital against their home should do so via a remortgage or by arranging a secured loan.

Although there are sometimes plus points for each possible solution, every scenario will be different and each will therefore potentially result in a different recommendation. In our view, the only way to guarantee that the “most suitable outcome” is achieved is to use a specialist broker, ideally one who can give advice on both mortgages and secured loans.

Also, web based applications that seek to determine outcomes on the numbers alone are mostly unable to factor in individual requirements and other ‘soft facts’ pertinent to a client’s individual circumstances and this can lead to disappointment when early more positive indications of acceptance are reversed later in the application process.

Finding the Right Second Charge Mortgage

There are many reasons why one solution will turn out to be more appropriate than another given the numerous factors that need to be taken into consideration other than the just the pure number crunching. Any recommended solution must not only meet the clients’ current requirements but should also represent an appropriate outcome for the reasonably foreseeable future.

When a Secured Personal Loan Could Make More Sense…

There are several scenarios where a secured loan may be more appropriate but as always, an applicant’s individual circumstances will determine the actual outcome. More specifically, the most common reasons a secured loan would be recommended as a means of capital raising rather than a re-mortgage are:

In all the above scenarios, the main mortgage can be left as it is and, subject of course to various credit and affordability checks, a new and separate secured loan is then taken out.

Want to know more?

Here at Caboodle Finance of Sutton Coldfield, Birmingham we help our clients review and assess their individual circumstances so that they may then secure the best possible outcome. Call today on 0121 308 9114 or just click HERE to contact us by email and we will be delighted to help you determine whether Secured Loans could be “right up your street”!

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.

Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England at SQ2 House, 240b Lichfield Road, Four Oaks, Sutton Coldfield, West Midlands B74 2UD (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of Pink Home Loans, Pink Home loans is a trading style of Advance Mortgage Funding Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 305008) for mortgage and non-investment insurance advice.
The Financial Conduct Authority does not regulate some forms of Buy to Let.

© 2017 Caboodle Financial Services Ltd