subject: There Have Been A Number Of Changes In Secured Loans And Remortgages [print this page] The once so very popular secured loans and remortgages have been through a fair number of changes in the past few years and in general not for the better.
Secured loans can also be called homeowner loans and second mortgages.
The fact that they are called this name is because they require to be secured on the equity of a property which obviously leads on to their next name of homeowner loans as only those who own their property have a property on which to secure the loan.
The term second mortgage is derived from the fact that they are in fact second mortgages registered as a security on the Land Registry behind the first charge which is of course the mortgage originally used to purchase the property
Secured loans were always a very popular loan for those who were eligible as they can be used for almost any purpose just in the same way as remortgages can, and they can be used for funding home improvements, weddings, a holiday home and are also useful when forming consolidation which rolls all the applicant's debts in credit cards, etc. in to one payment.
These homeowner loans make things affordable that otherwise may not be as their repayments can be spread out up to as long as twenty five years, and as some lenders allow the applicant to pay the loan back up until they are eighty five years old, almost everyone of working age is eligible.
However secured loans have very much more restricted underwriting criteria than they did before the recession when loans of up to 125% were readily available from a number of providers, meaning that homeowners with little or almost no equity could apply for secured loans.
The maximum loan to value now is 75% for those who are self employed and 85% for the others.
Bad credit loans though still available, are available in also a much more restricted fashion.
Before the recession bad credit loans and remortgages were available to homeowners with very adverse credit files, and even those who were on the verge of having their properties repossessed could apply for a secured loan or a remortgage which could in fact save the day.
Now the poor suffering homeowner cannot receive a remortgage in this way and homeowner loans are only available for such borrowers at 50% LTV and the maximum loan is usually only about 25,000.
There are self employed secured loans in the market without full accontants but the same is not true as regards secured loans.
It is possible to obtain a self employed loan with an accountant's reference or trade invoices with Inland Revenue correspondence can be an alternative to this.
There is one lender granting these loans at 60% LTV and the information required is three months bank statements and this plan is available to those trading for a minimum of six months
Therefore although the underwriting for these home loans is less lax and have under gone a number of changes they are at least still available..
by: Liz Moir
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