Get Fast Auction Finance with a Low Cost Secured Loan!

Melinda (Milli) Haine Melinda (Milli) Haine | Loan Underwriter

Do you need cash today to meet a significant financial need such as auction finance? Do you own a home? If you answered ‘yes’ to both of these questions, there is a solution for you by way of a secured homeowner loan taken against the equity in your home. Secured loans offer homeowners the opportunity to borrow large sums of money for flexible periods. We will explain how this works by using the example of obtaining a loan for auction finance.

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Let us assume that you want to attend a local auction in order to buy a new piece of property for investment purposes. The typical home auction requires the winning bidder to put down 25% at the conclusion of the bid. The remaining 75% is then due within a specified amount of time. If you do not have the cash on hand to pay the deposit, you cannot bid.

By obtaining a secured loan backed up by your home, you can have the cash you need to attend the auction. You can use a buy-to-let mortgage to pay the remaining balance when it comes due. There is only one catch: you have to have enough equity in your current home to equal 25% of the maximum amount you intend to bid for the investment property.

Truth be told, in most cases auction finance can be obtained with secured loans regardless of what it is you are looking to purchase. You might be a collector of old cars or someone interested in antiques. You may need new equipment for a restaurant you own. The point is, in most cases it does not matter with a secured loan. This kind of financing is intended to be used for long-term funding that is not covered by other sorts of loans.

What to Look For

There are two main things to look for if you are considering financing auction purchases with a secured loan. The first thing is the representative APR. As you know, 'APR' is an acronym that stands for annual percentage rate. This is the amount of interest you pay on the outstanding balance of your loan every year. Representative APR is slightly different.

The representative APR is a number representing the combination of the standard APR and all of the additional costs of borrowing. These costs include administrative fees, title fees, second charge fees, etc. The representative APR essentially tells you the total cost of borrowing money over the associated term.

The loan term is the second thing you need to pay attention to. A loan term is the amount of time you take to repay what you borrowed. A term of 10 years means you will make 120 consecutive monthly payments in order to fully repay your loan plus the interest. A shorter term means larger monthly payments. Why is this important? Because you do not want to take out a loan that you cannot afford to pay back every month.

Flexibility and Power

Financial advisors recommend loans secured on property because these offer both flexibility and power. They are flexible in the sense that homeowners can leverage the equity in their properties for virtually any purpose. A secured loan is a personal loan of sorts, so there are very few restrictions that banks place on using the money.

Such loans are powerful in the sense that they enable you to use the value of your home to fund other things. In essence, your home then becomes a financing tool that you can use to your own advantage. Some people even use the loans to remodel their homes, thereby increasing the value and building additional equity. That is a good way to put the full power of equity to use.

Whether you need auction finance, money to pay for educational expenses, or you just want to take a much-needed holiday, consider a secured loan from one of our reputable lenders. There are plenty of excellent loan products out there for you to choose from.

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