At Nemo we like to keep things simple so we have compiled a quick guide to secured loans to help you better understand what it is we do and how we could help you with those long awaited home improvements or to consolidate credit cards and loans into one, easy to manage monthly repayment.

To start at the beginning, what is a secured loan? A secured loan is a loan that is secured against some form of asset such as a house or a car. The idea behind this is that the asset can be sold to repay the loan therefore giving lenders the ability to provide higher amounts and for longer terms knowing there is that extra bit of security. Nemo offer secured loans for homeowners meaning you need to have a house with a mortgage to apply.

Once you’ve decided if a secured loan is the option for you, you may be wondering how one works. If you consider your mortgage as a first charge then a secured loan is a second charge. The order of the charges is the order they are paid off if the house is ever sold. To make sure there’s enough value (also known as equity in the house to repay all charges, lenders carefully assess the value of your home before offering a loan. All lenders have a set percentage of your home’s value that they will lend up to (referred to as an LTV calculation). For example, if a company will lend 85% of your property’s value (less your mortgage) and your home was worth £100,000 you’d work out 85% of the value and then subtract your mortgage balance to calculate the amount you could borrow. So it would be 85% of £100,000 = £85,000 then minus your mortgage balance, lets say it’s £50,000, = £35,000. You would be able to borrow that amount based on equity, subject to other factors such as affordability. As a property’s value is so important to Nemo’s ability to offer you the loan you are looking for, we cover all the costs in getting a valuation done for you!

To return to affordability, mentioned earlier, as well as keeping things simple and uncomplicated, Nemo is also a responsible lender. We won’t allow you to borrow more than we feel you can afford to repay so we also consider what income you have coming in and what money you have going out each month to make sure it all adds up.