2007-11-07 21:19:01
Can I Apply for a Secured Loan if I Already Have One?
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 We receive emails from readers regularly that ask this question.
Let's say that a person owns a property that is currently valued at 200,000 pounds. There is currently a mortgage of around 50,000 pounds remaining which is held at Northern Rock. In addition, this person took out a secured loan a few years ago to do some renovations, and there is currently around 11,000 pounds owing on that loan.
Can this person apply for another secured loan?
The answer to that is: of course. The lender will look at the current value of the property, and then multiply that figure by 1.25. Then, they will subtract outstanding loans and mortgages from the property from that amount, and the amount that they are left with will be the maximum possible amount that they will lend you.
So in this case, you would have 200,000 pounds x 1.25 which equals 250,000. Then, you need to subtract 61,000 in outstanding loans, so you are then left with a total of 189,000 pounds. This is the maximum amount that you are able to apply for, so as you can see, there is plenty of room to apply for a loan.
The fact that you already have a secured loan at another firm doesn't make a difference. A firm will still do business with you. They will do business with you even if you have an outstanding secured loan, arrears or even CCJ's. The fact that you are a homeowner makes you golden in the eyes of a potential lender, due to the equity that you have in your home.
Apply for a Lending Place secured loan today!
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