When is a Secured Loan Good Advice?

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More mortgage brokers are being forced to offer secured loans as an alternative to re-mortgaging.

With the new mortgage regulations into its second year, mortgage brokers are having to consider secured loans as an alternative for there clients.

Mortgages are simply a special type of secured loan with cheaper rates. Borrowing the money on your existing mortgage, or remortgaging to a new cheaper deal is a valid option, but isn’t always correct.

Clients best suited may have, heavy redemption penalties, recent CC-J's, a competitive mortgages in place, mortgage arrears with a prime lender and do not want to re-mortgage to a sub-prime lender, low have income multiples or could even be close to repossession.

As with first charge mortgages, there can be early redemption penalties on secured loans (second mortgage). However, with regards to loans £25000 and under, the lender may only charge a penalty (subject to a set formula) of 30 days or 1 calendar month if paid off early. This applies when the original loan term is more than 1 year. For terms of 1 year or less, no redemption penalty is payable. This penalty is set out in the rules governing repaying loans early and is covered by the Consumer Credit (Early Settlement) Regulations 2004.

http://www.liquidhomeloans.co.uk is a broker/packager helping mortgage brokers country wide to source, package and complete secured loans for there customers. Liquid has a whole of market panel from prime to deep sub prime.

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Clifford Connors
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