Homeowner Loans
Wondered what the difference between homeowner loans and secured loans is? Nothing - they are just different ways of describing the same product. A homeowner loan, as the name suggests, is a type of loan that is only available to people who have a mortgage on their home or who have finished paying off their mortgage and own their home outright. The full amount you will be entitled to borrow will depend completely on the exact amount of equity your home has. Therefore someone who owns their home outright will usually be able to borrow much more than someone who has paid half their mortgage and therefore only owns half of the value of their home.
Homeowner Loans Use The Equity In Your Home
Why do you need to use your property as an asset? Well imagine lending a stranger a large amount of money, you would want to make sure they were able to pay the money back eventually but also you would probably want some security so that person doesn't run off without repaying you. It makes sense that the lender would want some collateral from the borrower. With this peace of mind, the lender will charge a lower rate of interest than you would find with an unsecured loan.
Homeowner Loans Amounts
You can get a homeowner loan from between £5,000 and £250,000 over a repayment period from 3 years up to 30 years. The exact amounts and repayment terms on offer are entirely dependent on the lender you use and your own personal circumstances. You can generally get a decision in principle within 24 hours of applying however it can take 2-6 weeks to finally get any money. It all depends on how quickly you can get any documents that are needed to the lender and how quickly the lender processes that information.
Loan Purposes For Homeowners
There are no restrictions on what you spend your money on. Most secured loans are available for any purpose such as consolidating existing debts, buying a new car or motorhome, a holiday home or maybe an unexpected bill needs paying. If you have a bad credit history, mortgage arrears or County Court Judgments (CCJ's) you can still get a secured loan, there are plenty of lenders who will offer loans, however you may pay a slightly higher interest rate because of this.
Other Names for Homeowner Loans
Homeowner loans are often referred to as secured loans, home equity loans, equity loans, second mortgage or second charge loans but they all mean the same thing - you are lending whilst using your home as an asset. Whilst it can feel great to receive a large amount of money in your account always remember you do have to pay it back. Any missed payments or defaults on your repayments can result in your house being repossessed so make sure you have thought it through fully and can afford to repay any money you borrow.
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