Secured Loan Market Update
Data from the Finance and Leasing Association continues to show the Secured Loan lending market recovering from 2020 and the impact of Covid-19.
Around £101m was lent during the month of July, which although down on this time last year, it is nevertheless a market where lenders are gradually re-introducing criteria previously seen before the pandemic started, and as a result, the product is again proving to be a very valuable one, given the adaptability it offers homeowners in terms of access to quick and reliable funding.
What is a secured loan?
A secured loan, or second charge mortgage, is money borrowed and secured against property which already has a residential first charge mortgage in place. Very simply, the loan ranks behind the 1st charge or purchase mortgage. Loan terms can be up to 30 years and often the borrower will have a choice of fixed rates or variable.
Funds can be borrowed for almost any legal purpose, even paying HMRC tax bills if necessary! Typically secured loans can be used for home improvements, debt consolidation raising deposits to purchase investment properties, inject capital into a business, fund the holiday of a lifetime or pay for a fabulous wedding! The scope of these loans is extremely versatile, yet relatively little is known about them by many consumers.
Helping hand from Try Financial
Our secured loans team at Try Financial has access to lenders that don’t use a traditional loan to income multiplier that our customers might be familiar with when arranging a first charge mortgage. As the level of second charge lending is assessed purely on an affordability basis, there is likely to be a greater capacity to borrow compared to a first charge mortgage. Secured loans can be beneficial if you are on a very low residential mortgage rate which you might have to sacrifice if re-mortgaging, or the rate carries a heavy early repayment charge. In these instances, a secured loan can often be the most cost-effective option to raise funds. Either way, the Try Financial secured loan team will guide and advise customers through the whole process.
Sometimes obtaining funds as quickly as possible is the key reason a customer’s approach. Again, the experienced team at Try Financial, and our panel of secured loan providers are well placed to obtain the monies required quickly and efficiently. Secured loans have some important advantages as there are no legal process to go through and lenders often utilise computer-based valuations of property instead of sending out a valuer to the property. These two factors together can save many weeks.
We package Secured Loan applications for multiple lenders, meaning that when a case is outside of criteria, we can speak directly to the underwriters, and in many cases, find that they will make an exception and allow a case to progress. Some of these lenders only allow 100 brokers nationwide to package secured loans for them and we are incredibly proud to be included as one of them!
Secured Loans are an extremely useful lending product and, as the lending market recovers, we expect to see an ever-increasing number of our clients enjoying their flexibility and ease of access.
As always, call us on 01473 462288 or email to email@example.com for more details or, if you have an urgent enquiry you need to discuss.