You are here: Home > Mortgages > Mortgage News > Mortgage articles
Secured personal loans
Secured personal loans overlooked as alternative to remortgaging
Secured, second charge loans are being overlooked by brokers as an alternative to remortgaging, according to specialist lender FirstPlus.
Jeremy Masding, chief executive of FirstPlus, said the latest figures from the Council of Mortgage Lenders show remortgaging as 46% of total lending, but warned:"There are a lot of potential clients who represent a good borrowing risk but do not have enough equity to meet their needs through a remortgage. Others face early repayment charges or just do not want to add to the size or term of their loan. That is where the second charge loan comes in."
Alex Ruthven, director of broker AM Ruthven, commented: "A second charge loan can be an option for clients with current redemption penalties. They may find it more manageable to synchronise all their loans in the future, making for a neater package. Although, by the nature of the product, a second charge loan will invariably incur higher penalties than refinancing. Admin charges should also be taken into account."
However, Tom Bland, associate director at broker Savills, said: "With secured personal loans of up to 125% of the value of the home, the term of the loan is as important a factor as interest rates. There is a significant difference in borrowing £10,000 over two years and £10,000 over 10 years. The individual client's circumstances and repayment terms will determine whether a second charge loan or refinancing is more appropriate."
Bookmark with:
Facebook
Delicious
Digg
Reddit
Stumbleupon