Criteria for a secured loan or second charge mortgage is very similar to that of a standard mortgage.  Also as with standard mortgage providers each will have its own individual set of rules as to how they assess you and your application.

There are perhaps some main broad differences that apply to most, such as:

• Affordability:  Secured loan companies can on occasion offer slightly increased levels of loan sizes compared to main mortgage providers based on a more flexible approach to how they assess your ability to afford the loan.  They are however still regulated by the Financial Conduct Authority and have to apply a level of sensibility in their assessment.
• Purpose of the loan:  Where main mortgage providers will be very specific about what the reasons are for any loans being applied for ie rarely will they permit for speculative or business purposes, secured loan companies will consider finance for any loan purpose including tax bills.
• Loan to value:  This is one area where a secured loan may give greater restrictions than a main mortgage provider.  Generally speaking the maximum loan to value will be 85% for residential loans and 75% for buy to let finance.  This however is not necessarily the same right across the board so even if you may require more than this, it is still worth enquiring.

Much has changed in the buy to let market over the last few years and this in turn has also impacted buy to let mortgage criteria.   These changes have seen an increase in the level of buy to let secured loans where for many, improved assessments have enabled them to borrow funds that they perhaps would not have ordinarily been able.

As a secured loan is still a form of finance using the property as security, the main criteria remains constant in that the rentable value of the property will determine the level of borrowing permitted.  This is commonly referred to as the Interest Coverage Ratio or ICR.  However some secured loan providers are happy to also take an applicant’s personal income into consideration that on occasion enables a higher loan amount to be achieved.

Buy to let secured loan companies are generally also more flexible when it comes to the number of buy to let properties a borrower can have.  This can be especially useful for portfolio customers and the looking to build the number of buy to lets they own.

Although not common practice by all secured loan providers, there are some that will consider finance for properties that are not initially in a rentable condition that would not therefore usually qualify for a standard buy to let loan at the outset.  Bridge to let finance could hold the key for these clients where bridging finance can be offered initially and then converted to a buy to let mortgage once the property has been completed.

A question we are frequently asked is, can I still get a secured loan if I have bad credit, and although we can never guarantee that anyone will be approved until we have the full facts, it is certainly possible to obtain a secured loan with a history of bad credit.   Indeed one of the main factors for many when enquiring about a secured loan, or sometimes referred to as a second charge, is that they have been declined by their main mortgage provider for this very reason.

A secured loan company will still need to know the full facts and figures including dates and amounts of any bad credit events, as with any other lender, however, as this is a sector of the market that looks to assist in this area their understanding and criteria is generally better suited to your individual needs.

Invariably, as with any mortgage finance, should there be a history of bad credit, expect the rates available to you to be higher than for those who have a good credit rating.  You may also be more restricted in how much you can borrow against the value of your property, commonly referred to as your loan to value or LTV.

Secured loans, or sometimes referred to as homeowner loans or second charges, are fairy widespread in their availability however, what you will typically find is that the lenders offering these loans will be specific providers in this sector and not your main, and perhaps more recognised, names.  This however does not mean your lending is any more at risk nor that you will be treated in any different way as these providers are still regulated by the Financial Conduct Authority and have to abide by the same regulatory rules that your typical mortgage providers do.

It is also worthwhile pointing out that your obligations also remain the same, where your home or investment property when used as security is still at risk and can be repossessed should you not maintain your monthly payments.

With still such a wide variety of lenders in this sector and with each having their own criteria and ways of assessing affordability, it can appear a daunting experience when trying to find the right secured loan lender for your individual needs.  Our expert advisers are on hand to discuss your initial requirements, and where a secured loan is deemed a viable solution to your needs our secured loan contacts are well placed to source the right plan for you.

A secured loan is in many ways the same as a main mortgage aside of the fact that the provider is registering the loan as a second charge behind the main mortgage providers loan.  This is why this type of lending is also sometimes referred to as a second charge loan.

The very fact of the loan being registered second in line over the security will invariably mean that the rate offered will be higher than that offered by a main mortgage provider.  However as this sector of the market has become more popular, the increase in availability has in turn driven competition and as such made rates better than they have been historically when compared.

As these loans are treated very much in the same manner as a standard mortgage you also still get the choices of the same products.  Although not all are offered by each and every provider, schemes such as fixed rates, discounted or tracker variable rates are still available giving great choice.

Again, as with the main mortgage market, influencing factors will determine which rates are available to you such as, the type of loan ie residential or buy to let, the loan to value (LTV) ie the more you wish to borrow against the value of your home the higher the rate will typically be.  Your credit history will also be considered and therefore expect that those with a good credit rating to be offered better rates than those that have a history of bad credit.

A secured loan can be the right form of finance in the right circumstances and appreciating the rate can be an influencing factor of this bearing true, our experts are on hand to assist so why not contact us today to discuss your specific requirements.

Whatever you are raising funds for, IMC Mortgage Brokers has a team of specialist advisers with the skills and knowledge to source the right secured loan for you.

You’ll be allocated your own dedicated adviser who will guide you through the entire application process. As a firm of brokers, we have access to over 12,000 mortgage products. We consider each case individually and on its own merits, irrespective of credit history or status, meaning each and every customer can be confident of securing the most suitable deal available for their personal circumstances.

We’re confident you’ll be delighted with the individual service you receive, as we endeavour to find you the most suitable secured loan, tailored to your specific needs. For the right-secured loans on and off the high street, look no further than IMC Mortgage Brokers. Contact us today for free no obligation impartial advice.