The Benefits of a Secured Loan
February 8, 2010 by Tucker
A secured homeowner loan is, as its name implies, a loan secured against your home. Secured homeowner loans need no upfront survey, legal or other fees. The loan can be used for most purposes, including paying off outstanding loans or credit cards and reducing your monthly repayments. Also, the loan can be used for home improvements, a new car, a wedding, a holiday or to inject capital into your business.
There are various specialist loan companies willing to advance finance secured by way of a second charge against the your property over a period of between 5 and 25 years. Generally speaking, the maximum combined loan-to-value (LTV) of the current mortgage, plus the proposed additional secured loan, should not exceed 90%. In fact, some lenders will restrict the maximum LTV to 80% if for business use.
As the lender would be second in the queue for security, this involves a slightly higher risk which means that a higher interest rate would be charged, the interest rate depending upon the applicant’s credit history. Although secured homeowner loans might be more costly in terms of the interest charged in some cases, the following advantages may apply.
- A secured loan may usually be raised much more quickly than finance using a remortgage. Whereas it might typically take three weeks to arrange finance via a secured loan, it usually takes at least six weeks to remortgage.
- The applicant may be tied to a mortgage lender offering a low interest rate for say 3 or 5 years, which might involve early redemption charges if the mortgage is redeemed early. In using a secured loan, the mortgage can remain in place to avoid this charge.
- Whilst the applicant may have a 25 year mortgage, they may not wish to extend his business finance for such a long term, which would be the case if they remortgaged.
- Finance raised via remortgaging cannot be offset against the future profits of a business for tax purposes. However, a separate secured loan can be clearly identified as being for business use and offset against tax accordingly.
When thinking about applying for a secured homeowner loan, it is wide to consult with a professional loan broker who will search the market and source the best secured loan for you from a wide panel of lenders.
Lender's will seldom if ever will negotiate a true loan modification. But they will offer a forbearance and new payment schedule, in a hardship for example. The caveat…all interest will be due at some later date or upon payoff. Servicing agents sometimes misrepresent one for the other – a modification & forbearance. But the difference is in the offering. A [permanent] modification is for all intents and a purpose is a new loan that renders the deed voidable. The prior loan is expunged from the record.
All this is typically done due to some compelling cause such as a declaratory judgment and threat of action or settlement in lieu of an action, mediation or even as an order by the courts.
A forbearance agreement will always require some method of recovering the interest accrued to date whereby it is added to the already unaffordable payment. The promise to lower your payments later, is no commitment but a "maybe" upon the bank receiving all back due payments. It's another highly deceptive tool in a lender servicing agent’s arsenal of larceny.
The answer above is correct about the need for a professional. But you WILL NOT GET ANYWHERE WITH AN ATTORNEY OR DRE GENIUS unless you can substantiate the lenders need to remedy a problem caused by THE LENDER AND OR ITS AGENTS. This is something you will find likely based upon a discovery of any errors and omissions, negligence or fraud committed at settlement or during the servicing or your loan. Therefore you should get the file audited by a professional examiner who is qualified to underwrite and determine acceptance suitability and proper compliance using RESPA, TILA and GSE guidelines.
The findings then even the playing field and allow you to negotiate a modification with a caveat . . . your loan is rescindable!
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if u want to get rid of it, ur not pawning it, ur selling it. you haggle the price until u get to an agreement. i would say $150+
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