2008-01-06 04:08:45
Borrow Money Against Your House or Home: What You Need to Know
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 Owning a home or flat in the United Kingdom is a great investment. Not only does your asset appreciate in value on a near-annual basis, but you also develop increased equity in your home on a monthly basis as you pay down your mortgage. This increased equity can be important, as this equity allows you to take out loans known as "secured loans", or "homeowner loans."
When people refer to "borrowing money against your home", this is what they are referring to. With a secured loan, you are taking out a loan that is being backed by the equity in your home. You are pledging the equity in your home as collateral against the loan, and by doing that, are able to borrow large sums of money and pay significantly lower interest rates compared to an unsecured loan.
To figure out how much money you can borrow, simply perform this formula:
Take the total appraised value of your home and multiply by 1.25
Then from this number, subtract the total mortgage outstanding on the home. So, if your home is worth 200k pounds and you currently owe 100k on your mortgage, this would give you a total number of 150k pounds. This would be the maximum loan amount that you could be approved for. Most secured loan companies will lend to a maximum of 100k pounds, but some will loan you as much as 500k pounds, depending on your needs.
Secured loans can be taken out for a wide variety of different reasons, including: home improvement loans, loan consolidation and new vehicle purchases. Often times, secured loans can make sound financial sense. In the case of a home improvement loan, if you are planning on selling your home in the near-term and want to maximize its value, a home improvement loan is often a smart choice. Usually if you hire the right people, you will add $2 of value for every $1 that you spend on the home. Or, in the case of a debt consolidation loan, you will pay much lower interest rates with a secured loan compared to a bunch of unsecured, unconsolidated loans.
Typical interest rates for secured loans are usually about 7.5-8.5%. Compare this to an unsecured loan, which will usually run in the 13-14% APR range. Further compare this to a credit card, which will likely charge you about 18-19% interest rates. Secured loans certainly make the most financial sense, plus most secured lending companies will offer you extremely flexible repayment schedules, due to the fact that you are a "good" credit risk.
Applying to borrow money against your home or flat is quick and easy. Simply click on the link below this article, and you will be taken to an application form that will take no more than five minutes of your time to fill out. We'll put you on the fast track towards borrowing some money against your home.
Apply for a Lending Place secured loan today!
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