Loans secured on house

gazfocus

We get the keys to our new house tomorrow and we need to do some home improvements. I have spoken to Norton Finance breifly about a homeowner loan but just wondered, as a general rule of thumb, are loans secured on a house easier to get approved for than unsecured loans?

fluffymovie

I understand they are but I would always advise against if possible. My husband took out a secured loan against our house 7 years ago and is still paying it off.

Now that we have been here for 8 years and need to extend due to our first child being due in the summer, we are looking to remortgage and having the secured loan is delaying things as we have to get their permission to postpone the loan etc, for which they are charging £125!!!

If possible, i would strongly recommend you don't secure against your home

themull1

A lot of homeowner loans are variable APR's, if you eventually need a loan, try a fixed rate loan from somewhere. Tesco has some good rates. and because its for home improvements, you can get the loan over ten years.

longtermplanner

I agree with themull1 . be very very wary of taking out a secured loan at a variable rate. Sometime they put the rates up just because they want to!

Also I would suggest waiting a few months and saving up, so you don't need to borrow so much. That also let's you think more about what your priorities are by living in the place.

fozmcfc

I believe Norton are a company who offer those with poor credit ratings, secure loans, so normally better rates are available elsewhere.

Many people take out secured loans with companies such as them and in the past from companies such as Picture, First Plus, Ocean. They make it seem so easy and affordable, with borrowing upto £10k for only £87 a month.

But many people finally decided to look at how much longer they have to pay that £87 after 7 or 8 years down the line, then it dawns on them, that that £10k loan for only £87 a month, is actually going to take 25 years to pay off and cost £26k.

PeacefulWaters

No no no. Don't do it. High rates. Variable rates. Your home is at risk ...

Save up.

(How much is the house worth? How much have you borrowed from your mortgage lender? The answers to this will probably blow the plan out of the water).

Amy_Smith

Can I just suggest that you DON'T get a secured loan on your house.

Tempting though it is as a way to get your house renovations, you don't know what will happen in the future and if you get into difficulties then you will be forced to pay this loan as well as your mortgage to keep a roof over your head and it may be the thing that tips you over the edge. I have to pay an extra £500 a month for a secured loan on my house and, because my husband is now unemployed I am now in a position where all is lost and I am looking at bankruptcy and losing my home. If I didn't have to pay that £500 a month then I may have made it, and my marriage may have made it. I'm not saying the secured loan is the cause of all evils, but I would think very long and hard about it. I'd save up for the work if I were you. It may be all love and roses now, but you don't know what the future will bring.

da_rule

You may also have a problem getting the secured loan. If you have bought your house with a mortgage you will need your lenders permission to add another charge to the register. Depending on the deposit and LTV percentage they may decline to give this permission (after possibly charging you for the privilege of asking them), as their may not be enough equity in the house to satisfy both the mortgage and the extra loan.
Secured loans may be easier to get (as you are offering up security) but better rates are often available on unsecured loans. Also, depending on whether you are employing someone to do the work or if you are doing it yourself then a 0% credit card may be a better option (specifically if you are doing the work yourself and just need the money to by materials etc). You can then just play the credit card game and move from one 0% card to another until the debt is satisfied.