Will a secured loan effect my Mortgage?

stubbono9

I am looking at taking out a secured loan. Will this have any effect on my mortgage? Apart from the monthly payments does it have any other issues, for example would it have any adverse effect if I wanted to take equity out of my current property?

glentoran99

Surely that's what a secured loan is doing? Otherwise how else would you take out equity?

stubbono9

The equity coming out would be to purchase another property. The loan would be for something else.

glentoran99

stubbono9 wrote: »

The equity coming out would be to purchase another property. The loan would be for something else.

If you sell the house then you would need to pay off the secured loan from the proceeds reducing the money you have available for your new purchase

stubbono9

If I didn't sell the property and wanted to remortgage when my current deal expires would the fact that there was a secured loan against the property effect this?

glentoran99

stubbono9 wrote: »

If I didn't sell the property and wanted to remortgage when my current deal expires would the fact that there was a secured loan against the property effect this?

Yes as that portion wouldn't be available to secure a remortgage against

libf

stubbono9 wrote: »

If I didn't sell the property and wanted to remortgage when my current deal expires would the fact that there was a secured loan against the property effect this?

It will change your LTV ratio. Instead of just the mortgage you'd also need to account for the secured loan. You can't borrow more than 100% of your property value anymore (and probably not more than 90%).

https://www.moneyadviceservice.org.uk/en/articles/secured-and-unsecured-borrowing-explained

minimike2

Any reason why you need to do the borrowing as a secured loan? Assume you have already explored additional borrowing on your mortgage first?

kingstreet

stubbono9 wrote: »

If I didn't sell the property and wanted to remortgage when my current deal expires would the fact that there was a secured loan against the property effect this?

What do you understand by the word remortgage?

It is not asking your current mortgage lender for a new mortgage product when the current one ends. That is a customer retention product.

It is a new mortgage with a new lender to repay the old one and yes, a secured loan will certainly be an issue if that is your intention.

I suggest you seek independent advice and not pin your expectations on your understanding of terminology and the ability of those on here to pre-empt it.