Secured Loan
A secured loan is a type of loan whereby the borrower uses the equity in their home as security for the loan. These loans are used typically to help finance purchases, home repairs, or to consolidate debts. A secured loan creates a legal charge against the borrower's house.
Secured loans are most commonly second position loans (charges) although they can be held in first or, less commonly, third position. Secured loans require available equity in the property and reasonable loan-to-value ratios.
Secured loans are usually referred to as second mortgages, because they are secured against the value of the property, just like a traditional mortgage, and are usually, but not always, for a shorter term than first mortgages.