24 Hour Loans glossary of financial terms

Additional Loan Security

Additional loan security is a term most commonly used within the mortgage sector. This kind of security may be charged by a lender if you take out a mortgage/loan that exceeds their allowable Loan to Value (LTV) standards. So, if you want to borrow a higher percentage value of your property value than they would usually give out, for example, then they may ask you for extra security to guarantee the extra proportion of the loan. For example, a lender may offer 90% LTV as standard. So, if you want to take out a 95% mortgage then you may be expected to put up additional loan security.

This security can take various forms. It may, for example, be charged as a simple fee. Alternatively, a lender may ask for a certain amount of cash to be held on deposit or you may be able to use shares or other assets as acceptable security.