Secured & Unsecured Loan
As a home owner you may have the opportunity to borrow money based on the security of your property. Most homeowners use this option if their current mortgage lenders will not lend anymore.
Subject to your circumstances you may be able to borrow up to 125% of the property value, however you must be aware that if you borrow over the property value, you will be in negative equity.
Loans secured on properties that are already mortgaged are known as second charge, whereas loans secured against a property owned outright with no existing mortgage in place are known as first charge.
A secured loan is not however the same as a re-mortgage. A re-mortgage is the transfer of the secured loan from one lender to another, with the opportunity to release equity from the property.
In comparison a second charge is a loan secured against the property with another lender along with that of the first charge. In most cases second charges carry higher interest rates, as the lender will see it as a higher risk.
Home owners must be aware that they are obligated to repay the first charge on their home before paying the second charge. Property prices may also go down, which may leave you with insufficient equity to repay the second charge.
At CKFS we can arrange unsecured loans with competitive rate. An unsecured loan is not secured on your property therefore restrictions are enforced on the total amount you can borrow.
For an accurate illustration or further information please contact us now.
