Confused about secured loan

DaringDon

Hello all.

I'm confused about how secured loans work. I know it releases equity in your house but thats about it.

Basically, ive got 100% mortgage. I took the mortgage out 4 months ago. I know that I cant get a secured loan at the moment. However will it be possible for me to get one in 1 years time when the value of my property has increased, or would the fact that my mortgage is 100% mean I can never get a secured loan?

Thanks all.

DaringDon

pretty please?

jonesMUFCforever

You may be able to get a Secured loan in the future provided your house does appreciate in value.
Are you on a repayment mortgage or interest only?

Can I also ask why you are interested in a secured loan rather than a Personal loan?

DaringDon

Sure.

The reason I'm after a secured loan is becuase i was told its easier to get. I was recently knocked back for a personal loan..........cant seem to get one. My credit history doesnt seem to be the best. Ive never defaulted on anything or had any CCJ's etc. A few late payments on things (but not my mortgage).

My mortgage is with Future mortgages and I'm pretty sure its a capital and interest mortage (although i'm not 100% sure....would need to check that).

Do you have any loan suggestions?

CLAPTON

i think the question is really why do you want a loan at all? as you have a 100% mortgage presumably that means you are struggling a bit anyway so why do you want to add to the burden by adding more repayments to your outgoings?

Anyway the principle of a secured loan is that companies will lend you money based on the difference between the value of the property and the size of the mortgage ... they will usually do this cheaper than for an unsecured loan because if you can't pay they can force the sale of your home... so think very carefully about this before you risk losing your home.

DaringDon

Hi, thanks for the reply.

OK............the story. Are you sitting comfortably.............good then i'll begin.

I was with my ex for a few years and when we split i was left with about 8k of debt (about 7k on two credit cards and 1k on a couple of other smaller things). Anyway........i was staying in rented accomodation and had to make the move to buy somewhere. However I didnt want to do this just by paying the minimum monthly payments on my cars as they'd never get paid off.

Basically my Dad withdrew money from some shares he had which werent doing well and gave me 10k. 8K to pay off the stuff i owed and 2k for stuff for the new house (for which i am eternally greatful). I am now paying him £150 a month to pay it back. However I would really like to pay him back on a oner and be paying the £150 (approx) per month to a loan.

Hope that makes sense. Again, thanks for the replies.

rsykes2000

Look at it this way. Only if your dad needs the money, then get it.
He can not take your house if you default on the payments. A secured loan company will do if you default.
Is he charging you interest ? If not, just keep paying him, why pay extra to a company ?

DaringDon

Hi thanks for the reply guys appreaciate it.

Got another question about secured loans.........sorry lol.

OK...........if you get a secured loan and you go to sell your house, do you need to have the loan paid off, or can you say to the loan company that your going to pay them off with the profits from the sale (if that makes sense)?

mikeyboy

Hi there,

The secured loan would be paid by your solicitors from the proceeds of the sale of your house. SOME lenders may consider switching the loan from secured to unsecured, but this is uncommon.

Most secured lenders will want the 2nd charge to be cleared before releasing the charge over the property.

Might be worth a phone call to your loan providor asking them what their policy is

Regards
M