Release Property Equity with a Fast Secured Personal Loan!

Melinda (Milli) Haine Melinda (Milli) Haine | Loan Underwriter

The equity in your home is a lot like the steam produced by a boiler. It is just waiting to be released in order to be used for something profitable. Where steam can be used to heat a home or power a turbine, equity can be used to finance things you otherwise would not have the money for. If you have substantial equity in your home, you might as well put it to use for your own benefit by way of a secured personal loan.

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A secured loan is obtained based on the amount of equity you have in your home. If you do not know, equity is the difference between what your home is worth on the retail market and how much you owe on your mortgage. At the peak of the housing crisis many homeowners found themselves in a negative equity position; i.e., they owed more money than they could get by selling.

A positive equity position gives you leverage to borrow fairly large amounts of money over long periods. Provided the loan-to-value ratio meets lender standards, you can borrow up to 100% of your equity. That money could be used for a variety of purposes, including:

  • consolidating high interest debt
  • covering higher education costs
  • paying for elective medical procedures
  • renovating your current home
  • purchasing a holiday property.

The beauty of personal loans is that these can be used for just about anything. When you secure a loan with the equity in your home, you are combining the flexibility of a personal loan with the raw power of equity. The two together can help you achieve your long-term financing goals.

Loan-to-Value Ratio

We mentioned the loan-to-value (LTV) ratio as part of taking a secured personal loan. This ratio is the measurement of how much a consumer is borrowing as compared to the total value of the asset being used as collateral. In the case of a secured loan, the home acts as collateral. The higher the LTV, the more money the borrower has access to.

Understand that a 100% LTV is reserved only for those borrowers with the highest credit ratings and strongest repayment capabilities. It is rare to find secured loans offering 100% LTV. Most are within the 50% to 75% range for preferred borrowers. The LTV you might eventually be eligible for will be determined by your financial circumstances.

Secured Loan Expert helps you compare lenders and loan offers side-by-side. Among the things you compare is the LTV ratio from one lender to another. You will also be comparing representative APRs, minimum and maximum borrowing amounts, and repayment terms.

Borrowing to Renovate

One of the more popular uses of the secured loan is to renovate one's primary residence. This ends up being beneficial in two important ways. First, the borrower is able to release the equity in his or her home for the purposes of financing the renovations. Second, renovations usually increase the resale value of a home over time. Using a secured loan in this way essentially releases equity that will eventually result in more equity down the road.

By using a secured personal loan to finance renovations, you are turning your home into an investment of sorts. By borrowing money today, you are able to improve the value of your home for future resale. That higher resale price should cover the entire cost of borrowing against equity. To that extent, there is some risk involved. However, the risk is minimal given the historic performance of property prices.

If you are considering applying for a secured personal loan for any purpose, Secured Loan Expert is here to help. We provide masses of helpful information on our website as well as professional assistance in comparing, choosing and arranging secured loans. We are here to help you release the equity in your home in order to meet your long-term financing needs so just call our friendly team of experts today.

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