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Secured loans - not just for Christmas

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The best of intermediary-based lending comes under one roof at November’s Finance Professional Show held at Olympia Central in London. One major reason why Smart Money Loans is taking a stand, and sponsoring the Show, is because the firm is passionate about the place of secured loans in the lending market and their usefulness to intermediaries.

Paul Crewe, Director of Smart Money Loans said: “We are looking forward to talking to brokers about the opportunities which secured loans give as an option to remortgages as a means of capital raising. I want to show that at the heart of it, secured loans and first charge mortgages share the same DNA, but that a secured loan can fill the need in a much more precise way than a remortgage. I have always found it ironic that the definition of a mortgage or secured loan is exactly the same, as they are both just loans secured against property, and yet secured loans still struggle for the recognition they deserve. I am often asked where secured loans fit in to the portfolios of busy intermediaries; my answer is quite simple. If your client wants to raise capital for almost any purpose, the secured loan provides the ideal facility to achieve that exact aim. I think the main issue for advisers comes with thinking outside the conventional remortgage box. The remortgage route was considered a ‘safe bet’ particularly when money was plentiful, and also attractive on face value by subsuming the extra borrowing into the larger mortgage. By spreading the cost of the extra borrowing over a long term, it made it seem that monthly repayments were not greatly inflated."

"However, just how appropriate is that kind of advice today? Remortgaging might still look attractive, but the costs involved, time to completion, client credit profile and the hidden interest costs of stretching borrowing over a mortgage term are factors which every intermediary needs to take into account. If we add in the withdrawal of interest-only and the tightened criteria many high street lenders have adopted, it is clear that the case for secured loans is a strong one."

“Secured loans can be repaid early (one month’s interest) carry no upfront charges such as legal, lender arrangement fees or valuation fees and with rates starting at less than 6 per cent, they make a strong case for inclusion in any adviser’s summary of alternative funding solutions. Perhaps the biggest advantage they have is that they can sit behind the existing first charge mortgage and therefore there is no need to uproot the client from what could be a very good existing mortgage deal, which cannot be replicated by remortgaging.”

So come and talk to Smart Money on stand A10 and if you have not been convinced in the past by the advantages of secured loan, they can assure you that you will leave with a different point of view.

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