I’m often asked lots of questions about secured loans, so I have taken a selection and listed them below with more importantly the answers; hopefully this makes secured loans a bit clearer…
What is a secured Loan?
A secured loan, also known as a homeowner loan, is a loan that is secured against your home. Like a mortgage, that means your home may be at risk of repossession if you are unable to make the monthly repayments.
Who Can apply for a secured Loan?
To apply for a secured loan you must be a homeowner with an outstanding mortgage and have enough equity in your property to at least cover the amount you wish to borrow.
What is LTV and is it important?
LTV stands for Loan to Value .LTV is calculated as the amount you owe on your mortgage as a percentage of the market value of your home in other words the equity in your property. For example if your home is worth £100,000.00 and you have £70,000.00 outstanding on your mortgage, your LTV would be 70%. We can find loans for customers up to 95% LTV.
Can I apply for a secured Loan if I do not live in the property?
Yes secured loans can be obtained on BTL (Buy to let) properties as long as you can provide a formal tenancy agreement. Lenders will look at an LTV of up to 80% on these types of properties.
Can I apply for a secured Loan if I am Self Employed?
Yes you can apply for a self employed secured loan, provided you have been self employed for at least 12 months and can produce an SA302 from the Inland Revenue or an Accountant certificate. Some lenders will want to see a full set of accounts and business bank statements.
Can I apply for a Secured Loan if I own my property outright?
Unfortunately if you own the property outright you cannot apply for a secured loan, you may have to consider applying for a first charge loan or mortgage.
I work Part-time; can I apply for a secured Loan?
Yes you can apply for a secured loan if you work part-time or are on a low income, that’s because some of our lenders will take into account benefit payments such as child benefit and tax credits, We will of course assess your ability to meet the monthly repayments as lenders will not lend you more than you can afford to pay.
I do not have a perfect credit history; can I apply for a secured Loan?
Yes you can apply for a secured loan even if you have a poor or low credit rating. If you have missed payments on other forms of credit or have adverse data such as a default or CCJ we may still be able to help you. The APR available is dependent on individual circumstances and lenders may charge a higher rate where there is evidence of a poor credit history.
Why would I take a secured Loan instead of a personal loan?
A secured loan is often more suitable if you wish to borrow a large amount i.e. more than £20,000 or if you wish to borrow over a longer term. Many personal loan providers will not lend to people that are self employed or who have past credit problems so a secured loan is a good option in these instances.
What can I use a secured Loan for?
Basically any legal purpose, the majority of secured loans are taken for home improvements or debt consolidation, but they are also used for business purposes or deposits on holiday homes or Buy to lets.
How much can I Borrow?
Our lenders offer loans form £10,000 to £2000, 000.
How do I apply for a secured Loan?
You can apply on line at www.hoskinhomeloans.co.uk or by calling us on 01621 876030
Why Should I use a secured Loan broker?
Most secured lenders do not accept applications directly, so to get the best choice of available loans you will need to use a secured loan broker to help you with your application. We are a secured loan broker with 20 years + of experience arranging loans and we will help you to complete your application accurately and work with the lender to secure a completion as quickly as possible.
Why do I have to pay a fee?
Like all brokers we charge an arrangement fee which is added to the total cost of the loan and repaid along with the interest charged on the total amount borrowed. It will cover all of our costs, including legal and valuation fees. There are no stand alone or upfront fees.
What Information do you need from me to complete an application?
We take a full application or fact find to assess your income, employment and residential history, most lenders will want to see evidence of your income, by way of pay slips or accountant’s reference and some form of ID usually a passport or driving license.
How long will my secured Loan take to complete?
On average a loan takes around 4 weeks to complete –The quicker you sign and return the credit agreement and all the information we request the quicker the loan can complete.
What is the consideration period for?
The consideration period or cooling off period is there to protect you, to give you the time you need to make sure the loan is right for you and that you want to continue with the application. During this time we will not contact you unless you call us or sign and return the credit agreement.
Can I settle my secured Loan off early?
Yes you can , You will need to contact your lender and request a settlement or redemption figure , you will not have to pay all of the interest that you would have paid over the full term instead most lenders charge one or two months interest charge to offset their costs.
For more help and advice please do not hesitate to contact me.
Kind regards,
Ian Chambers
Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. 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. 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.
