Secured loan with no previous mortgage?

StewartD

Official MoneySavingExpert.com insert

For full info on secured loans, see the main website's Secured Loans guide.

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Hello All,

First post by me and I'm afraid its a question as opposed to an answer/solution for anyone, I do hope that this is ok?!

I am currently in the market for a secured loan and/or a mortgage as I would like to release some of the funds from my property equity - upon researching around the net to try and see the in-out of what's involved, it has become apparent that most if not all lenders stipulate that for a secured loan, your *must* have an existing mortgage?

Due to having some luck at the tail end of the IT boom I was fortunate enough to be able to purchase my house outright back in 2009, therefore I have never had a mortgage.

Does anyone know or can anyone offer any information on if I can still apply to one of these places without a pre-existing mortgage? I thought it best to ask on a forum like this before I litter my credit file with 'enquiries' from lenders.

Many thanks to all for any advice/information given.

-Stewart.

CLAPTON

not much info here

how much do you want
what's your salary
what debts do you have
why do you want a secure debt

jonesMUFCforever

You haven't said why you need the money or how much?

StewartD

Hi - Thanks for the replies.

I have had some previous bad credit hence why looking at a secured solution. I am looking to borrow approx 7500 over the next 3/4/5 years - My current basic is £17500, however, with shift allowances etc the last 2 years have been around £23k income. The only outstanding debts I have are listed in the list below.

I think what the loan is going to be used for is irrelevant however, for those interested here is a shortlist of what the funds would be put towards..

1) Clear off 1 payday loan.
2) Clear outstanding HMRC payments from when I was self employed.
3) Get new double glazing for my house as existing is wooden and useless.
4) Guttering replaced and small hole in wooden fascia on roof repaired.(Done on mates rates!)
5) Have front and rear gardens re-landscaped for minimum maintenance(Done on mates rates!)
6) Purchase a slightly newer car to run around in, as opposed to my rust chariot 1997 corsa diesel that is on its last legs/MOT.

Hope the above is enough info.

Cheers,
Stewart.

Edit: Just had a look at my credit file and flipping virgin media have added a default for £225 from 3 years ago?! I will need to dispute this, I have only just got my credit file to be all nice and green and now these idiots have put a default on my account! Default for a service I couldn't use because they never ever sent out a viewing card to put in the box, even after me requesting one multiple times. Anyhow - that's another story and another mark on my file that I will need to fix Grrr.

CLAPTON

I of course don't know all the facts but

from what you have said
-you won't be able to get a mortgage (defaults, loan too small)
-you won't be able to get a normal loan (defaults, salary, general credit files)

-which is good for you as getting a secured loan risks losing the house

so you should
-get rid of the PDL asap (stop spending, stop going out, eat pasta and food from the fridge /larder until it's clear

-then save up and only spend what you can afford.

probably not what you want to hear but that's the way it is.

bestofdevon

Have you tried having a chat with as company like London and Country who are independent and provide a range of mortgages and should be able to tell you your options - and they don't charge.

StewartD

Thanks "best of devon" I will take a look at them.

Clapton: Thanks for your info/advice.. but your telling me that even tho I am sitting on equity of £120K+ No lender will give me a chance?

I wont go in to full details of my circumstances RE the PDL - if it wasn't for that, I wouldn't have a car and would probably be out of a job. Problem being once in the PDL rut it is very hard to get out as more often than not the full amount needs paid on a month that you have no overtime and so the vicious circle continues.

Anyhow back to my OP - Why must anyone have an existing mortgage to get a secured loan? Surely if you own your home outright and have no mortgage on it, these lenders would jump at the chance to give you credit?

[Deleted User]

no chance of any normal credit/mortgage while you have a PDL

CLAPTON

your equity is very usefull once you have sold the house and have the cash in the bank

lenders want to be reassured that you can make the payments

you have lived mortgage / rent free for 3 years; why don't you have savings?

why much do you owe?

as I said; stop spending, eat from the fridge/larder, packed lunches until you clear he PDLs then start to save

tlh858

StewartD wrote: »

Anyhow back to my OP - Why must anyone have an existing mortgage to get a secured loan? Surely if you own your home outright and have no mortgage on it, these lenders would jump at the chance to give you credit?

Whether you get the loan/mortgage mainly depends on your ability to pay, not how much your property might be worth or the available equity.

If you already have a mortgage, there will be a record of payments being made to it regularly, and therefore some indication that the individual can manage their money.

Unfortunately, all you have is a payday loan which is still outstanding and a default from something else - both of which are huge negatives and will destroy any chance of getting a loan.
There is also the question of why someone working full time with no mortgage or rent to pay (by far the biggest expense for most people) requires a loan.

jonesMUFCforever

Quoted from OP ''I think what the loan is going to be used for is irrelevant however, for those interested here is a shortlist of what the funds would be put towards.. ''


So any answer I might have put here is irrelevant!