If you've been paying off a mortgage for some time, and would love to be able to get that cash back, even temporarily, there is a way. You can release the equity in your home and use it to pay for remodelling, a once-in-a-lifetime holiday, or anything else that would otherwise be unaffordable.
A secured loan is a loan that is taken out with your home as security. This means that if you miss payments and go into default, the lender can legally possess your home. It goes without saying that only homeowners can take these kind of loans out, but the good news is that even those with less than desirable credit ratings could get one provided they have the equity in their home to start with.
A secured loan amount is typically between £5000 and £100,000, but it can depend largely on how much of your original mortgage you have already paid off. Some lenders will only lend up to that amount, others only a percentage of it, yet still others could lend over and above it – but only to those with a perfect credit score.
Finding the best secured loans isn't as difficult as it sounds, once you know what to look for and where to look. Use the internet to compare APR from different lenders, and look for the lowest interest and lowest repayments you can find. Get quotes for different terms, as you will pay less interest over 10 years than you will over 15 years.
Another thing to check for when comparing secured loans is the settlement fee. Some lenders will charge it, some won't. In most cases, if one is charged, it will be around the equivalent of one months interest. It stands to reason that if you settle early, lenders will lose out on the interest you would otherwise have paid, so they try to compensate for this by charging the settlement fee. If you think there may be a chance of being able to settle early, inquire about fees before finalisation of the loan.
As with any loan, there are penalties for missing payments, but in the case of secured loans, the penalty could be losing your home. The best advice is, don't take out a secured loan unless you are confident you can keep up the repayments.
Source:http://www.articlesbase.com/loans-articles/
the-best-secured-loan-for-you-284176.html
No comments:
Post a Comment