homeowner loans 8.2

What Are Secured Homeowner Loans?

Secured homeowner loans are loans where you can borrow a large and substantial amount of money at better interest rates to standard unsecured loans, providing that you own your home or any property, and you are willing to borrow against the value of that property as part of the deal. They are also known simply as secured loans, or second mortgages because you are in effect taking out another mortgage all over again!

So How Do Secured Homeowner Loans Work?

These loans work first of all by you applying for a certain amount that is less than or equal to the value of the property you are willing to borrow against. You will not be able to borrow more than the value of your property, as this is what the lenders will want as part of deal and they call this 'security' or the 'collateral'. If you are ever unable to carry on with the repayments each month on the loan, then the lenders will have the right to take your property away from you to replace the money you have not been able to pay. This is the main risk with secured homeowner loans, the word 'secured' only has any meaning to the lender as it is you that will have it all to lose if things go wrong! However, as long as you think your income is a solid and stable one, and you do not see that changing in the future, you should have no worries.

Tell Me About The Advantages...

This type of loan usually comes with a much lower interest rate than other finance deals such as overdrafts, credit cards and unsecured loans, because the lender is comfortable with this sort of deal as there is less at risk with secured homeowner loans. Also, the amount of money available to you is much higher than a secured loan, it can be as much as the value of the property you lend against.

There are also no restrictions on what you can use this money for, as long as you keep up on the repayments. Whether it be a new conservatory or extension, a long awaited holiday or a brand new dream car, the choice is yours.

But I Have A Low Credit Rating, Will I Still Be Eligible?

Even if you have a low credit rating, this usually does not affect your chance of being successful in obtaining secured homeowner loans. As long as you own a piece of property that is higher or equal to the amount you are applying to borrow, then even with a low credit rating it should not stand against you.

I Only Part Own My Home, Can I Still Get This Loan?

Yes, but only for the amount you have already paid off on you mortgage. There is a certain type of loan you need to apply for called a second charge homeowner loan, with first charge loans for people who own their property outright. When you apply for a loan on your property, a charge is registered at the Land Registry, with your mortgage provider having first charge on your property, and the loan provider having second charge.