| When a lender receives a secured loan application | | | | you will need a good explanation to keep your rate |
| form he only has two areas on which to base his | | | | down. |
| decision - you and the property. If he can put a tick in | | | | To speed up you application you could get proof of |
| both of these boxes then you will get your loan at a | | | | your last 12 months payments from you mortgage |
| good rate. | | | | lender and proof of the outstanding balance. |
| However, it is possible to still get your loan if either you | | | | Secured loans - your property |
| or the property are not A1. | | | | Your property is the security that the secured loan |
| This is one of the good things about secured loans, | | | | lender has. If all goes wrong and you stop paying and |
| they allow you to obtain a loan when other sources of | | | | communicating with the secured loan lender then |
| finance may not be available. | | | | eventually he will reposes your property (although he |
| Secured loans - You | | | | will not want to as it is creates another set of |
| Unfortunately, most things in this day and age are | | | | problems for them). |
| broken down and put into boxes and that includes you | | | | So, putting the above cautionary note aside, you are |
| when you apply for a secured loan. | | | | putting up your property as security for the loan. You |
| Your boxes will be:o Your employment/ self | | | | are only doing this because it benefits you and you |
| employmento How many outstanding loans you haveo | | | | probably fall into one of the following categories:o A |
| Your usable (free) monthly incomeo Your credit ratingo | | | | lower rate than other unsecured loans offero A larger |
| How you have treated your current (and previous if | | | | loan than is available through other financial sourceso |
| less than 12/ 24 mths) mortgage company | | | | You want a loan but your employment is questionable |
| Secured loans - how to improve "you" in the eyes of | | | | or you are self employedo You have missed a few |
| the secured loan lender | | | | payments on some credit and the loan rates you are |
| Most applications for secured loans are made through | | | | being offered from other sources are unpalatableo |
| a broker as most lenders do not like to gather all the | | | | Your credit is poor and you need to put up security to |
| information needed to process a secured loan. There | | | | get a loan |
| is also a lot of overhead in this process which they | | | | It only makes sense that if you are putting your |
| prefer the broker to pay for. | | | | property up as security for your secured loan then you |
| Secured loans - rule 1 | | | | may as well maximize its value and get a lower rate. |
| Make sure you find yourself a good secured loan | | | | The secured loan LTV (loan to value) is one of the |
| broker. The secured loan lenders are not going to like | | | | major calculations that will effect the rate you are |
| me saying this but all brokers are not equal in the eyes | | | | offered. It is simple to work out: you take your current |
| of the lender. The better ones earn more money per | | | | outstanding mortgage, add to that the secured loan |
| application and get more secured loans paid out, as a | | | | you are applying for and divide it by the current value |
| percentage, than others. | | | | of your property. The lower the percentage the better |
| These both directly effect you as the more the lender | | | | rate you should get. |
| pays the broker the less of a fee he will need to | | | | So, if you want a lower rate then maximizing the |
| charge you and the other reason is that you are more | | | | properties value is one of the best ways to go about |
| likely to get you loan paid out (and at possibly a lower | | | | it. It might take a little bit of time but you could be |
| rate) by using a well established secured loan broker. | | | | paying for the secured loan for anything from 5 years |
| Secured loans - rule 2 | | | | to 25 years so the extra bit of effort could save you |
| Work with you broker - not against him. I know it is a | | | | a lot of money in the long term. |
| pain to keep having to produce paperwork but the | | | | Secured loans - property rule 1 |
| more you have, the less pain you will receive when | | | | You will almost certainly have a valuer come round to |
| your full loan application reaches the secured loan | | | | have a look at your property towards the end of your |
| lender. | | | | secured loan application. |
| Secured loans - rule 3 | | | | Valuing property is not a science but an opinion and in |
| Go through your available income with your broker and | | | | this case the the persons whose opinion counts is the |
| get him to explain how the lender, he is putting you | | | | valuers that you have coming round. You don't know if |
| with, is working out your available income calculation. | | | | he has spent most of the day sitting in a traffic jam, |
| You might find you get a better rate if you do a bit of | | | | had an argument with his children or forgotten his |
| debt consolidation. | | | | anniversary and what is more you can't do a thing |
| If you are self employed but have regular contractual | | | | about it. |
| work that you can prove goes back a few years, | | | | What you can do is be friendly and offer him a cup of |
| then you may be able to argue for a better rate. Self | | | | coffee and make sure you have allocated time for |
| employed applicants for secured loans are usually | | | | him. Go round the property and point out any |
| penalised with the rate as they are considered a high | | | | improvements you have made and are going to make. |
| risk. | | | | Valuers like to be told that the property is going to be |
| Secured loans - rule 4 | | | | improved as it lessens their risk of getting sued by the |
| Your credit rating is nowhere near as important for | | | | secured loan lender in case they value the property |
| secured loans as it is for personal loans (unsecured). | | | | wrongly. |
| However, it is still important if you want a good rate. | | | | Secured loans - property rule 2 |
| Lenders of Secured loans (like most lenders) don't like | | | | Before the valuer gets to your property make sure it |
| to see arrears on a credit report. A credit report will | | | | is looking its best. A small bit of effort will add |
| show the lender how you have paid your credit cards | | | | thousands to your valuation if the property looks well |
| and loans over the last 12 months. It will also show any | | | | kept rather than run down. |
| defaults or county court judgements. | | | | First impressions count so make sure the front and |
| Most secured loan lenders will ignore one months | | | | entrance hall is spotless, try and put any junk away to |
| arrears on most loans as this can be argued that it is | | | | make the rooms look bigger and also try to finish |
| just a late payment. When you start to get to two | | | | those jobs that were half started and never quite |
| months or more then you need a good (preferably | | | | completed. |
| provable) explanation or your rate will start to go north. | | | | Secured loans - property rule 3 |
| One thing secured loan lenders hate is current arrears | | | | As previously stated, the property value is an opinion |
| when you apply to them for a secured loan. So, if you | | | | so you need to make sure that the valuers opinion is |
| can, make sure your current commitments are up to | | | | the correct one. All valuers will contact local estate |
| date when you apply and this will keep your rate | | | | agents to see what is selling in the market near your |
| down. | | | | property. |
| Secured loans - rule 5 | | | | It would be to your benefit if you contacted the estate |
| How you have paid your mortgage is sometimes | | | | agents and got comparable properties that are on the |
| more important than your credit report as the secured | | | | market and recent sales. You can then decide which |
| loans lenders see themselves as an extension of your | | | | of your collection you wish to give the valuer (or you |
| mortgage and the best way they can see if you are | | | | can send them on to your broker but this is not quite |
| going to pay them is to see how you have paid your | | | | as good as giving them to the valuer). |
| current mortgage. | | | | Human nature being what it is, your comparables will |
| So, if you can, make sure your mortgage is up to date | | | | probably end up in the valuers file and he will take |
| when you apply and if you have had any arrears then | | | | these into account when valuing your property. |