Release the Cash Tied Up In Your Home with an Equity Loan!

Adam Brand Adam Brand | Operations Director

Would it not be great if you had an asset that you could use to help pay for things your regular budget did not allow for? If you own a home, you do have that asset at your disposal. It's called equity. You can use the equity in your home to borrow large sums of money over long periods by getting a secured loan. Known as an equity loan, this type of financing is usually very affordable and easy to apply for.

If you are not familiar with financial terms, equity is the difference between the remaining balance on your mortgage and what your house is worth if you were to sell it today. As an example, let us just assume you still owe £80,000 on a home that would likely sell for £125,000. Your equity is valued at £45,000. To a bank offering secured loans, that's £45,000 they can hold as security when loaning you money.

image one

By taking out a property loan secured against your house, you are essentially agreeing to allow the lender to put a second charge on your property. Should you default on your loan then the lender can repossess your house for the purposes of recovering their money. Nevertheless, keep in mind that they are second in line behind the bank that holds your mortgage. If the sale of your home does not cover both the mortgage and the secured loan, you will still be responsible for the remainder.

Money That's Easy to Get

Consumers love the home equity loan because it is money that is fairly easy to obtain. Unlike unsecured loans that rely on the borrower's promise to repay, a secured loan is a lower risk for banks because tangible property is offered as security. Banks are more willing to lend under such circumstances. What's more, a combination of good credit and a high amount of equity opens the door to a lot of potential.

You can borrow a substantial amount of money against your home under the right conditions. Just imagine having tens of thousands of pounds to work with to consolidate high interest debt, renovate your home, purchase valuable collectibles, pay for elective healthcare, or cover just about any other expense you can think of.

Compare and Apply

Your home is the most valuable asset you own. As long as you are putting time and money into it, you might as well make it work for you by leveraging your equity as a financing tool. How much can you borrow? That depends on the amount of equity you have and your credit rating history. You will never know until you start comparing lenders and loan products.

Secured Loan Expert recommends that you start comparing by using our whole of market comparison tables covering the top high street lenders and specialist lenders that you may not have heard of. You will want to look at loan offers side-by-side, paying attention to things such as representative APR and loan terms. It also pays to do some research so you understand the vocabulary of the secured loan market.

For example, the representative APR is a combination of the standard interest rate plus all of the known, upfront costs of borrowing. Banks must approve at least 51% of their applications at this rate in order to advertise it. Nonetheless, that means the other 49% could be approved at higher rates. Do not just assume the representative APR is what you will get if you're offered a loan.

Other terms to familiarise yourself with are loan-to-value (LTV) ratio, loan term, and early repayment penalty. These are all things that play heavily into how much you will be eligible to borrow and the total amount you will pay over the life of your loan.

There are few other forms of consumer financing as powerful and flexible as the home equity loan. Secured Loan Experts recommends this sort of funding for any long-term financing needs you might have. Secured loan financing is powerful, flexible, cost-effective, and a great way to use the best asset you have as a positive financial tool.

Alternatively, you can get FREE professional advice from our team of equity loan specialists. Just call our experts and they will help you find, compare, choose and apply for the best deal from our whole of market panel of top high street and specialist lenders.

We don??t work for the lender and our only interest is ensuring that you get the best deal to suit your individual circumstances.

Instantly compare 950+ of the UK's best secured loans

Rates from as low as 3.75%