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Secured Lending - a Guide to Releasing the Value in Your Home

The recent boom in house price values have made some homeowners more wealth than they could have possibly earned though working in their jobs, however what use is all that wealth if you can't get your hands on it until you've sold your house? The quickest and easiest way to unlock the increased value in your home is often a secured loan that will allow you to receive a lump sum upfront without having to move or remortgage your house.

Why take a secured loan?

Perhaps it's time to take that amazing touring holiday, perhaps it time to replace the kitchen or even build an extension to your home, with unsecured lending normally restricted to amounts less than 25,000 if you need borrow more money then the best option will be a secured loan. Using a secured loan you could borrow up to 100,000 to spend at a low rate of interest because the lender has a second charge on your home.

Securing a loan on your home

Taking a secured loan is different to taking out an unsecured personal loan in several ways firstly the amount you can borrow is governed by the amount of equity you have in your home. The amount of equity is the current value of your house minus any outstanding mortgages and other loans.

After you have established how much you can borrow, the lender will make you and offer and undertake a survey on your house (usually a desk survey not involving an actual visit by a surveyor). If you progress the lender will then register a second charge on your home, this then gives them the right to receive money from the sale of your house should you fail to make repayments on the loan.

After you have taken out the loan you will then begin repaying the loan in small monthly payments, because the loan is secured against your property the loan can be arranged for a longer period of time and the longer the time you take the loan over the smaller the monthly payments.

Taking out a secured loan could be the answer to your dreams.

Rhodri James is the Consumer Finance Manager for Decision-Finance, a company that specialises in providing customers with on-line quotes for financial services such as secured loan and unsecured loan.

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