Secured loans — can we still get them?

Did you see the recent address by the Royal Bank of Scotland economist Robert Gardner in Wales recently?

He noticed that falling house prices here in the UK are making people feel less wealthy and perhaps blunting their short-term optimism about the future.

Well, this is true. But for anyone with a reasonable amount of equity in their home, secured loans, the tried-and-tested method of using equity as a security for a quick loan will still work. Wonderfully!

This is because the fundamentals of this financing mechanism don’t change with shifts in the economy. If you’ve had your home for some years, and have been regularly paying off your loan, the price will have gathered some appreciation and your proportion of the value will have risen. A banker, even in dark times, is looking for a secure place to lend his shareholders’ money. And what is more sure for him than the tangible asset you live in — your home!

So if you get hit with one of those common family crises that come to most of us, like the need for a new car, or an addition to the house because the kids are growing up, then your application for a loan secured against your holding in your home will almost always be well received in the high street banks and by the non-banking lenders.