Secured Loans for Buy to Let
Instead of looking at the complications of a Buy to Let remortgage, a secured loan is an alternative way to borrow equity against a property you already own. A secured loan is also known as a Second Charge mortgage–this is because your Buy to Let property will usually have a mortgage secured against it (i.e. the first charge), and any later further borrowing on top of this is a second charge.
A Buy to Let secured loan might be a simpler way to access more borrowing, but it is commonly more expensive than a Buy to Let remortgage, and the associated arrangement fees are usually higher.
People will mainly make use of a secured loan if they are in a position of being tied in to an existing mortgage deal period with their current lender, where the early payment fees would prove very costly, making a secured loan actually the cheaper alternative in those circumstances. It could also be that a secured loan lender is willing to lend a larger amount to the borrower than the current lender, and so this becomes the preferred option.
There are a number of reasons why you might want to raise extra funds on top of the borrowing you already have with your current lenders–you could need the extra cash to consolidate existing debts, purchase another Buy to Let property for your portfolio, or to make improvements to the properties you already own. Whenever you look into additional borrowing, make sure that it makes financial sense for you in the long term and take professional advice to ensure you get the most suitable deal possible.