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Can I Have More Than 2 Secured Homeowner Loans on My House?

Depending on the amount of equity you have in your home, it is possible to have several personal loans secured on your home.

Indeed, you can have as many secured loans on your property as the equity in your home and your income allow.

If you are looking to take a secured loan, the chances are that you will have a mortgage on your property. The mortgage lender takes what is called a ‘first charge’ over your property. This means that in the event that you fail to keep up your repayments, the mortgage company has the first claim on any money raised from the sale of the property.

A secured homeowner loan provider typically takes a ‘second charge’ on your property. This again means that they have a legal interest in your home and a legal claim to any proceeds when it is sold. However, they can only make their claim after the mortgage company (the ‘first charge’ lender) has been paid what they are owed.

A mortgage lender will typically have to agree to a second loan being secured on a property.

It is therefore possible for you to have more than two secured homeowner loans on your home. In this situation you will normally find that:

  • Each existing lender will have to give their permission for a new loan to be secured on the same property
  • Each new lender will take a ‘charge’ over your property

You may find that the interest rates on the third, fourth or fifth secured loans may be higher each time. This is because the lender has less of a legal claim on the proceeds from the sale of the property than the existing lenders. Each new lender is potentially less likely to recoup their money if you fail to keep up your repayments, making it a riskier lending proposition each time.

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