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Loan secured on property advice?

HaGGis! (Elite) posted this on Tuesday, 13th May 2003, 14:10

Can anyone offer me some advice on getting a loan secured on property.. is it a stupid thing to do? has anyone done this?..

I have just applied for a sizeable loan.. too big to be a personal loan.. so it`s one secured on property.. have i made a terrible mistake?... or is this a standard practice that a lot of people do?

RE: Loan secured on property advice?

Neiliboy (Elite) posted this on Tuesday, 13th May 2003, 14:40

Nowt wrong with a secured loan at all.

Alot of people opt for a secured loan beacuse :

a) can be cleared sooner than a re-mortgage
b) In the long term you will probably pay less interest than a mortgage.
c) Normaly quicker to set up than a re-mortgage.
d) Rates better than an usecured loan as the loan takes a 2nd charge on your property behind the mortgage lender.

Make sure that interest is calculated daily and added on at the end of the month and make sure you can pay into it as and when you like. This will save you thousands in interest if you do this.

You will get better rates if you have a clean credit history.

If you go for one of the brokers from the back of a national newspaper ie:

Freedom
Norton
Ocean

You will find they all offer you largely the same package the rates they advertise are all from a Finance House called First National Bank PLC (part of the G.E Group).

DO NOT Measure the cost of the loan by the APR, measure it by the monthly cost and the monthlyinterest rate. Assuming you go for the type of loan mentioned above.

More often than not these brokers MAY be able to give a better deal than your bank so be sure to shop around before you commit.

Hope this helps

Neil

This item was edited on Tuesday, 13th May 2003, 15:42

RE: Loan secured on property advice?

AShearer (Mostly Harmless) posted this on Tuesday, 13th May 2003, 14:54

Haggis,
Pretty much a standard for the lender to require collateral (property)on anything above £25k+. Lots of lenders but also a lot of sharks - probably cheaper to increase your mortgage or remortgage - will get you a lower rate - but then again the mortgage is secured against the house.
Worthwhile checking all the options - can save you thousands - even although it pains me to say it, a Independent Financial Adviser can more than pay for his fee.

Regards,
Big Fat Billy

RE: Loan secured on property advice?

julianf (Elite) posted this on Tuesday, 13th May 2003, 16:20

I had one off of HFC once - great low rate, great way to consolidate if you`ve got job security - and it`s against the particular property so you get the benefit of a 10/15/20 year loan or whatever at mortgage rates and you can pay it off when you move and still have equity left if you haven`t gone right up to the hilt...

And remember - you`ve got a legal right-to-cancel - check the terms and conditions.

julianf

RE: Loan secured on property advice?

Roger James (Elite) posted this on Wednesday, 14th May 2003, 08:30

Just a little word of warning..............why do you think so many finance companies, most of whom advertise on Sky, offer large loans to people with appalling credit histories, provided they`re homeowners? Let`s face it, if someone is a bad payer in the past (and i`m not saying here that you are) then they are unlikely to change much in the future. So what`s in it for the likes of Ocean et al? Well, if someone with one of these large loans defaults by usually 3 payments, then they move in for your property. It`s not unusual for them to sell an £80,000 house at auction for £15,000 to cover a debt, and, of course, your left homeless! My advice, do it if you can afford the repayments with plenty to spare. Roger.

This item was edited on Wednesday, 14th May 2003, 09:31

RE: Loan secured on property advice?

HaGGis! (Elite) posted this on Wednesday, 14th May 2003, 09:05

"Let`s face it, if someone is a bad payer in the past (and i`m not saying here that you are) then they are unlikely to change much in the future"

i disagree.. i believe people can learn from their mistakes and change.. I have..

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