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 Secured loans – using your asset as security 
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Post Secured loans – using your asset as security
by: David Lynes - Loans4

If you are a homeowner in the UK and you are looking to borrow money for one of a wide range of purposes, then you can enjoy an added advantage compared to non-homeowners, and this is the ability to use your home as security. Your home can act as a valuable asset in many ways, and in addition to providing you and your loved ones with a valuable investment that could benefit you in the future, as well as providing you with a home, it can also be used to provide you increased financial leverage.

Over recent years more and more people have started to take advantage of the rising levels of equity in their homes by using their asset to borrow money. Borrowing money against your home means that you can enjoy a range of benefits that you would not get with secured loans, such as longer repayment periods, lower monthly repayments, greater borrowing power, and more. For many homeowners borrowing money by using the home as security has become an effective and affordable way to borrow.

Another benefit of using your asset as security in order to borrow money is that you have a far better chance of getting the finance that you need if you have poor credit. Those with damaged credit may find it difficult of even impossible to get a loan in the current financial climate, but the chances of getting a loan that is secured against the home are far greater because of the additional security provided to the lender.

In order to use your home as security in order to get a loan you first need to determine the value of the property, which you can do by getting several estate agent valuations as well as checking out the cost of similar homes in the same area. You then need to work out how much you owe on the property by way of mortgage or secured loans – you will normally have to contact the lenders in order to get accurate figures.

You should then deduct the total amount that you owe on the home from the market value of the property, and this will give you your equity figure. You can then get an idea of how much you may be able to borrow by way of a secured loan, although the lender will also have to take other factors into consideration in addition to your equity levels when deciding this.

Using your asset as security in order to get affordable finance can prove effective, but you should also bear in mind the possible risks before you make any commitment. The first is that you could risk losing your home if you are unable to keep up with repayments on a secured loan. The second is that you could fall into negative equity where you owe more on the property than the value of the property in the event that house prices fall.

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David Lynes

Loans4 provide homeowner loan solutions for homeowners. Please visit for the latest finance related news.

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Fri Dec 12, 2008 3:52 pm
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