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About Home Equity Line of Credit

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About Home Equity Line of Credit

What is a HELOC?

Selina Finance is offering the first Home Equity Line of Credit (HELOC) in the UK, introducing a flexible and affordable way to finance large purchases or projects.

A HELOC is a flexible line of credit that allows homeowners to get funds by using their home as security. It is a revolving line of credit that generally gives you access to more funds than an unsecured loan, and combines the flexibility of a credit card with the lower cost of a mortgage. A HELOC sits on top of your existing mortgage. It does not affect your current rate or repayments.

The term of a HELOC can range from 5 to 30 years. During a 5 year flexible period, you have full flexibility with the freedom to drawdown, repay and redraw again as many times as you wish, only paying interest on the outstanding balance.

Selina Finance Limited is a company regulated by the Financial Conduct Authority (FRN 820183).

How can I use my Selina HELOC?

The Selina HELOC is multi-purpose. You can choose to upgrade your home with a new kitchen or extension for your family to enjoy, put down a deposit on a second home or trade up your car to the next model.

Many customers also choose to use their funds to pay for school fees or treat themselves to a special holiday.

You can also use the Selina HELOC to consolidate existing loans. If you are thinking of consolidating debt, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

How much can I borrow and for how long?

The Selina HELOC offers funds from £10k up to £500k, depending on the equity in your property, over terms from 5 to 30 years.

What happens after the flexible period?

After the 5 year flexible period, any balance that is still outstanding is repaid by your standard monthly payments to ensure it is cleared by the end of the term. If you wish, you can always pay back more at any point in time, without fees or penalties.

What advantages does it have over remortgaging?

There are several advantages over remortgaging.

The first is that you never pay early repayment charges. Most banks charge for remortgaging and additional borrowing on your mortgage. The Selina HELOC is simply a secured facility that sits alongside your mortgage without having any effect on its repayments.

Another advantage of the Selina HELOC is its flexibility. You can drawdown funds up to your credit limit in the flexible period and you will only ever pay interest on the amount you've withdrawn. You can also overpay as and when you wish without ever incurring additional charges.

Used responsibly, a HELOC can provide you with valuable advantages. However, you should consider the possible impact on your ability to secure additional borrowing against your home. As this is a secured loan, if you fall into financial difficulties, your property could become repossessed and sold to repay the debts.

What rates apply?

The Selina HELOC is offered at a minimum variable rate of 9.45%.*

However, to get an idea of how much borrowing will cost you, it is more sensible to look at the APRC. The APRC is a percentage which represents the annual cost of borrowing against a security property and includes the interest rate and any other fees such as the product fee and the arrangement fee. It allows customers to compare different products available on the market. Please note the APRC you receive will reflect your individual circumstances.

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*Representative example: A HELOC of £100,000 drawn out in full over 25 years at a variable rate of 9.45% would result in 300 monthly payments of £904.99. The total cost after 25 years is £271,497.00 which includes £171,497.00 of interest, a £1,395 product fee and a £3,000 arrangement fee added to the balance. APRC: 10.41%

Are there any fees?

Yes. There is a one off £1,395 product fee applied to the Selina HELOC as well as an arrangement fee of up to 7.80% of your loan amount (capped at £3,000).

You have the option to either pay these fees up front or add them to the balance of your loan and pay them back as part of your monthly repayments. These fees are included in the APRC.

There are no hidden costs, recurring fees or early repayment charges (ERCs). In most cases, there are no property valuation costs unless we need you to commission a RICS valuation (in-person valuation) instead of an AVM (automated valuation model).

Can I repay early?

Yes. We want to offer you maximum flexibility, which is why we don’t charge you for making early repayments. Whether you want to repay in part or in full, during or after the flexible period, the choice is yours and there are never any extra costs.

Will you ever decline my drawdown request?

As a responsible lender, we have to make sure that you are not taking on more debt than you can handle. If your circumstances or requirements have changed since you applied for our facility and you no longer meet our lending criteria, we may decline additional drawdowns subject to terms and conditions.

What do repayments cover and how are they made?

Repayments are made monthly by direct debit and cover both capital and interest.

Will my repayment amount change?

Your monthly repayments amount is based on your outstanding balance which will vary depending on your drawdown and overpayments.

About Homeowner Loan

What is the Selina Homeowner Loan?

A Homeowner Loan is a second charge mortgage (commonly referred to as a secured loan) that allows homeowners to get funds by using their home as security. This security generally gives you access to higher amounts and longer terms than unsecured loans, with borrowing from £10k to £500k over terms from 5 to 30 years.

Unlike with a HELOC, you will get all your funds on day one. A Homeowner Loan sits on top of your existing primary mortgage. It does not affect your current rate or repayments.

Selina Finance Limited is a company regulated by the Financial Conduct Authority (FRN 820183).

How can I use my Selina Homeowner Loan?

A Selina Homeowner Loan can be ideal if you know what amount you need from the outset. For instance, if you know exactly how much a deposit for an investment property is or how much debt you need to consolidate. If you are thinking of consolidating debt, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

The Selina Homeowner Loan is multi-purpose. If you wish, you can also pay for different purchases with one facility. Home improvements, paying for school fees or purchasing a new car are popular uses among our customers.

How much can I borrow and for how long?

The Selina Homeowner Loan offers funds from £10k up to £500k, depending on the equity in your property, over terms from 5 to 30 years.

What rates apply?

The Selina Homeowner Loan is offered at a minimum variable rate of 9.00% and from 8.45% for fixed rates.*

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*Representative examples:

A Homeowner Loan of £100,000 over 25 years at a variable rate of 9.00% would result in 300 monthly payments of £872.72. The total cost after 25 years is £261,816.00 which includes £161816.00 of interest, a £995 product fee and a £3,000 arrangement fee added to the balance. APRC: 9.91%

A loan of £100,000 over 25 years results in 60 monthly payments of £833.89 at a fixed annual rate of 8.45% and 240 monthly payments of £867.71 at a reversion rate of 3.75% above the Bank of England Base Rate. The total cost over the full term is £258,283.80, including interest of £158,283.80, an arrangement fee of £3,000, a product fee of £995 added to the balance. APRC: 9.61%.

Are there any fees?

Yes. There is a one off product fee of £995-£1,195 applied to the Selina Homeowner Loan depending on the product selected as well as an arrangement fee of up to 7.80% of your loan amount (capped at £3,000).

You have the option to either pay it up front or add it to the balance of your loan and pay them back as part of your monthly repayments. These fees are included in the APRC.

There are no hidden costs or recurring fees. In most cases, there are no property valuation costs unless we need you to commission a RICS valuation (in-person valuation) instead of an AVM (automated valuation model).

Can I repay early?

Yes you can. However, some of our products carry early repayment charges. Where ERCs apply, you will have a 10% overpayment allowance which will be recalculated annually on the anniversary of the loan based on the outstanding balance at that date. If you make overpayments within your overpayment allowance, you will avoid incurring ERCs.

Your mortgage adviser will discuss the best product for you based on your needs and circumstances and the details of any restrictions will be documented on your mortgage offer.

What do repayments cover and how are they made?

Repayments are made monthly by direct debit and cover both capital and interest.

Can I change my repayment amount?

No. If you make overpayments to your Homeowner Loan, it will reduce the total amount of interest you repay. Full details on how it may affect your repayment amount and term can be found on your offer document.

Eligibility

Who is eligible for Selina products?

Selina products are specifically designed for homeowners.

To be eligible, you and your co-applicant (if applicable) will need to be on the title deeds of the property title and:

Be a permanent UK resident with at least 3 years of address history
Have a personal income of at least:

£22,500 per year for individual applications

£30,000 per year for joint applications

Have a good credit history. Each applicant must individually meet our credit history requirements.

This is a non exhaustive list of requirements.

What are the basic property requirements?

To be eligible to the Selina products, your property needs to:

Have a minimum value of £100,000
Be owned by you (and your co-applicant, if applicable) for a minimum of 6 months
Be within a 85% maximum Combined Loan-to-Value (CLTV): your outstanding mortgage combined with any other loan secured against the property including your borrowing from Selina should not exceed 85% of the value of your property

Your property can be your main or secondary residence.

This is a non exhaustive list of requirements.

How do you value my property?

We use an automated valuation model (AVM). By asking you a few questions, we will be able to provide an accurate valuation. This service is completely free of charge.

Occasionally, an AVM is not able to provide a valuation of your property in which case we may need you to commission a RICS valuation for which there will be a cost.

Applying

How do I apply?

A hard credit check is only conducted once your full application is submitted.

1 - Get an instant quote in less than 2 minutes. We will perform a soft credit check (without any impact on your credit score).

2 - Continue and submit your application on your personal portal. There, we will ask for further details about you, your property, credit commitments and household expenditure. Your personal advisor will discuss your application and make a product recommendation, free of charge.

3 - Get funded! The final checks all being well, we will help you get the funds easily and promptly.

What are the supporting documents?

During the application process, we will ask you to complete an identity verification check requiring an ID/Passport and a proof of address. You will also need to upload a proof of your income and bank statements. Some additional documents could possibly be asked by your personal advisor.

Help and contact

How can I contact Selina Finance?

To get more information about the products offered by Selina Finance, you can visit our website or email us at hello@selinafinance.co.uk.

If you've already submitted an inquiry or if your application is in progress, you can contact your advisor via email or call on 020 3608 5788.

If you would prefer to send something by post, please see our address below:

Selina Finance
HYLO 103-105 Bunhill Row
London, EC1Y 8LZ

How can I make a complaint?

Customer service is important to us. If you have a complaint about anything, we’d like to hear about it straight away, so we can try to put it right for you and improve our service.

Please visit our complaints page.

What happens if I miss repayments?

If you cannot make your regular payments, please contact us as early as possible on 020 4525 8044. We will discuss your situation and agree the best way forward, given the challenges you are facing by exploring multiple options.

Our priority will always be to find the solution that is best suited to your circumstances.

Frequently asked questions

About Home Equity Line of Credit

About Homeowner Loan

Eligibility

Applying

Help and contact