Property sales are booming right now. House prices are soaring, making it a seller’s market – but with the stamp duty holiday extended until September, it’s a buyer’s market too.

It’s easy to see why so many people are trying to get on the property market. One of the main advantages is that once you’re an owner, you can save money. You’re no longer paying the rent that was paying the mortgage on someone else’s property. Plus, you can control your costs easily, especially if you have a fixed mortgage, as you know that you’re not at the mercy of a landlord who might want to change how much you pay them each month.

Another major plus-point is that it’s a form of security. In fact, secured loans – often referred to as homeowner secured loans or second-charge mortgages – allow you to use your property as collateral. This means that, with this type of loan, the lender can sell your property if you don’t keep up with repayments in order to get their money back.

If you’re a property owner, you might be considering taking out a secured loan and wondering if it’s possible to take out more than one at a time. Here, we look at whether this is possible and what it involves.

Why take out a secured loan?

It might seem like a big risk. Your home that you own is a huge asset and taking out a loan that could remove this asset can put you in an awkward position. But secured loans have their advantages.

First, they can potentially give you access to larger amounts, allowing you to borrow as much as £100,000 in some cases. As this is a large amount, you can stretch out the repayments over a longer period than you would for a personal loan. Plus, if you have a poor credit rating, you’re more likely to be approved.

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Can I take out more than one secured loan?

Generally speaking, as long as you’re not overleveraged, which is where you’ve borrowed too much money and unable to make the repayments, or you owe more than your property is worth, you can technically have as many homeowner loans as you want.

However, you might find that, the more secured loans you take out, the higher the interest rates are on each of these. This is because the lender doesn’t have as much of a legal claim on your property as the one you took your first secured loan out with. As they’re less likely to see their money again if you miss repayments, they need to find a way to make sure they get their money, and increasing the APR is how they do it.

A risky proposition

The more loans you take out, the higher the risk. You have more repayments to keep up with and increasingly higher interest rates to consider. Therefore, you’ll need to weigh up whether it’s worth adding another secured loan to the one you might already have.

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