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Homeowner Secured Loans Guide - Page 2 of 7:
Right now you may well be asking yourself 'What is a Secured Loan?'.
And it's a good question too, so before we move on with the rest of the guide and detail and compare Secured Loans against other forms of borrowing it might be a good idea to examine just what a homeowner secured loan is, and discuss any potential downsides and indeed benefits of a secured loan.
'So, exactly what are Secured Loans then?' we hear you cry! Ok, let's get on with it...!
A Secured Loan or Homeowner Secured Loan is a borrowing facility where you will be required by the lender to use your property as security. Your mortgage is of course a type of secured loan, and it is also referred to as the "first charge".
The Homeowner Secured Loan plans are arranged on behalf of borrowers who already have a mortgage, and are also referred to as "second charge loans", or "second mortgages", and that's because the security takes the form of a second charge or second mortgage, thus ranking second in line to the "first mortgage" lender.
In the event that a borrower can no longer maintain their mortgage or secured loan repayments, their property is likely to be taken into possession and sold. The debts are paid off in order of security ranking, assuming of course that there are sufficient funds.
The main Building Society (or Bank) mortgage will be repaid first, because it is the first mortgage or first charge. The next debt to be repaid will be the Homeowner Secured Loan, because that is secured by a second charge (mortgage). Once the secured mortgages and loans together with the costs of repossession have been repaid, the customer will receive the balance (if any).
So what are the benefits of a Secured Loan? Well, let's take a look at some of the plus points of Secured Loans...
There seems to be a lot of positive aspects to homeowner secured loans, but are there any negative aspects? Well the answer is, as with many things in life, yes there are things to be aware and cautious of.
So if you were asking 'What is a Secured Loan?' - then hopefully we've managed to answer your question! You might also find further useful information in the following glossary pages...
Next up let's take a closer look at Secured Borrowing and how much you may be able to borrow...
NEXT: Secured Borrowing: How much
could I borrow with a Homeowner Secured Loan? ›
Mortgages/Remortgages: The overall cost for comparison is 9.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances. For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
Homeowner Loans: Rates from 8.9% APR variable, but typically 13.9% APR variable. Most customers are likely to receive a lower rate or the same rate as our typical variable rate - learn more about APR. Shire Direct also has a range of non-conforming loan plans with rates up to 19.9% APR. These plans are designed to help those who may have a more difficult credit history, including CCJ's and credit arrears, IVA and bankruptcy problems.
A broker fee of between 0% and 10% of the loan advance may be charged for arranging a secured loan.
All loans subject to status and secured on property.
The actual rate available will depend upon your circumstances. Written quotations on request.
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.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Over £2,000 worth of Argos Vouchers to be won in the Shire Direct Grand Prize Draw 2008! Terms and conditions apply - please read article for full details.
Claim £100 worth of Argos Vouchers upon completion of your transaction throughout 2008. Terms and conditions apply - see our Vouchers Special Offer page for full details.
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.