Home Equity Loans - Second Charge Loans
Home equity loans, or second charge loans, as they are sometimes called, allow you to get cash by making use of the equity in your home. The value of the equity in your home is the difference between the current value of your home and the amount oustanding on any mortgage(s).
Taking out a home equity loan is not the same as undertaking a house remortgage.
A home equity loan is a second mortgage, a loan secured on your home. It is independent from your first mortgage on the property. In contrast, a remortgage entails making changes to your existing mortgage. This can be advantageous but depending on the status of your first mortgage may mean you incur some early redemption charges. If this is the case then opting for a 2nd mortgage should be seriously considered.
The key points to note are:
- Home equity loans enable you to realise cash from your property value without having to sell the property
- A home equity loan is separate from the first mortgage on your home
- You can use the money released for any purpose, including home improvements or a home extension, debt consolidation, clear credit card debt, purchase a second home or even for that longed for holiday
- You can borrow up to 125% of the equity you have in your home
- Second mortgage loans offer flexible repayment options and terms
- Second mortgages are low interest rate loans, subject to your own circumstances
- They are straight forward and easy to set up but it is best to use an expert to guide you through the process and ensure you get the best solution for your needs.
