Mortgages

Bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short-term access to money at a high-rate of interest. As well as helping home-movers when there is a gap between the sale and completion dates in a chain, this type of loan can also help someone planning to sell-on quickly after renovating a home, or help someone buying at auction.

Bridging loans can be used for a variety of reasons, including property investments, buy-to-let and residential developments. They are also aimed at landlords and amateur property developers, including those purchasing at auction where a mortgage is needed quickly.

A secured loan (also known as a homeowner loan) is a credit agreement that is backed using the equity in a property owned by the borrower. Borrower pledges some asset as collateral for the loan, when then becomes a secured debt owed to the creditor who gives the loan.

Loans of this kind are only available to people who own their own homes, and can be used to borrow anything from about £5,000 to £125,000. However, the amount you can borrow, the term and the interest rate you are offered will all depend on your personal circumstances and the amount of equity you have in your property.

This type of loan is most suitable for someone whose low credit score makes it hard for them to get a low-rate personal loan. There are risks involved in borrowing via secured loans, though. You could, for example, lose your home if you fall behind with the repayments, so it is vital to ensure that you do not overstretch yourself.