Why choose a buy to let secured loan?
A buy to let secured loan can offer you many benefits. Primarily they offer you the ability to borrow money using the equity in your property that can be used for a range of reasons.
A buy to let secured loan may be ideal for you if you:
- • Are on a fixed mortgage rate – you may be tied into a preferential mortgage rate with your current mortgage lender. A secured loan provides you with an alternative borrowing solution that doesn’t affect your existing mortgage.
- • Are looking to maintain an existing mortgage rate – if for some reason your credit rating isn’t as good as it was once, it could mean that a secured loan on a buy to let property would be a better alternative to re-mortgaging your property with a potentially higher interest rate.
- • Are looking to borrow more - usually, applicants are allowed to borrow a larger sum of money with a secured loan, in comparison to other forms of lending such as an unsecured loan. It can also be easier to obtain for those with poor credit files. This is because the property that is secured to the loan reduces the financial risk for lenders.
How does a buy to let secured loan work?
A secured loan is a mortgage that is secured against the equity you have built up in your property. It means you will have two mortgages with the secured loan sitting behind the initial mortgage.
A buy to let secured loan offers a great way to release equity from your existing buy to let property. The term secured is a reference to the fact that the loan will be secured against an asset, in this case a buy to let property which will be used as security if you can’t pay back the loan. As there is a security involved, typically interest rates are lower than those available for unsecured loans.
You may have heard also of them being referred to as a second mortgage, a second charge mortgage and even a homeowner loan.
It’s important to keep up with your monthly mortgage repayments as otherwise the asset your loan is secured against could be repossessed.
What can you use a buy to let secured loan for?
A buy to let secured loan allows landlords to borrow money using the equity that’s in their buy to let property, or portfolio of properties.
Buy to let secured loans are a useful source of borrowing for many landlords, as they can be used for a variety of different reasons.
Whether you wish to renovate and make home improvements to your current properties, raise funds to invest in another buy to let property or even consolidate your debts, we can help find a loan suitable for your needs.
It is important to note that the property that the loan is secured against acts as a form of security for the lender. This means that if you were unable to keep up with the monthly repayments, the lender could repossess the property.
How much could I borrow using a buy to let secured loan?
The amount you can borrow relies on the available equity that’s in your property. Equity is the portion of your home that you own outright free from any mortgage.
At Mercantile Trust you can borrow as little as £10,000, up to a maximum of £500,000, with repayment terms from 3 to 25 years. It’s easy to apply, simply fill out our application form, or call the number at the top of this page.
Whilst a secured loan on a buy to let property can give landlords the funds they require, it is important to note that mortgage offers are dependent on various factors. Lenders will look at an applicant’s personal circumstances, such as their income, credit history and outgoings
What are the interest rates on a buy to let secured loan?
Buy to let secured loan interest rates can be lower than other unsecured forms of borrowing such as personal loans. This is because if the borrower defaults, the lender can repossess the property the loan is secured against.
The rate you’re offered depends on the amount you wish to borrow, the amount of time you wish to borrow for, your credit score, and the equity in the property being used as security. For this reason to establish exactly what rate you may be offered it is best to get in touch with one of our advisors and discuss your circumstance with them.
I have poor credit history, will I still be accepted?
Having a poor credit profile doesn’t mean that you will struggle to obtain a buy to let secured loan, however you may find there are less lenders that can help you.
Although some lenders may not be able to assist, we have and can help individuals with poor credit profiles. We consider all credit histories including those that have:
- • Accounts in defaults
- • CCJ’s (County Court Judgement)
- • Missed payments (maximum of 2 within 12 months)
- • Historic IVA (individual voluntary arrangement) which is now settled
How do I apply for a Buy to Let Secured Loan?
Applying for a secured loan on a buy to let property is a straight forward process which can be completed online by following our application process or by calling one of our qualified advisors using the number at the top of this page.
It’s important to remember that your property may be repossessed if you fail to repay your mortgage.