Homeowner loans explained

If a circumstance occurs whereby you need a significant sum of money that is not readily available to you, one of the most straightforward methods of obtaining the extra cash is through a loan. One established and licensed online loan provider can supply you with a wide variety of homeowner loans that can be acquired either through their own very reliable service or via their comparison facility.

A homeowner loan is categorised within the same bracket as a secured loan as it is similar in its terms. On taking out this form of loan you will be required to secure it against the value of your property so should you find yourself unable to repay the loan amount in full, the lender will be able to claim anything owed from the value of your home.

The amount you can borrow through a homeowner loan is normally more than many other types of loan as you are securing it against an asset that is generally worth a significant amount of money. The exact amount will be finalised in accordance with the value of your property alongside various other financial conditions.

Each individual application is studied in depth on its own merits with full confidentiality of your personal and financial details. Seasoned and knowledgeable consultants will assess your application for a homeowner loan and will strive to have a definitive answer as to whether you have been approved or declined in the shortest possible time frame.

The comparison option offered on this easy to follow website allows you to study a range of policies from the leading insurers, alongside their own, to make sure that you get the best possible deal. You can rest assured that you will get a clear breakdown of each individual policy as the sole aim is to see you obtain the best deal through the use of their unbiased advice.

Homeowner loans available from a loan specialist such as this allow you to get hold of a large amount of money to be used in the case of an emergency. If you are in a situation that requires more money than you would be able to obtain through a more traditional loan, securing the amount of money you borrow against the value of your home will show all lenders that you are committed to repaying the loan amount in full.

Key elements that the borrower should verify and be aware of when borrowing homeowner loans.

Homeowner loans can be used for a wide variety of purposes. General home improvements and debt consolidation are two of the most common reasons a homeowner takes out this type of loan. Before any type of homeowner loan is issued, there are a few key elements that the borrower should verify and be aware of. Here are a few questions to ask:

1. How do I get the best rates?

2. How much can I borrow?

3. How long will it take until I receive the money?

4. What is the time period that my loan payments will be spread out across?

5. What happens if I miss a payment?

6. Will my loan affect my credit score?

7. What if I need to borrow more money later on?

8. Can I repay the loan before the end of the contract without penalty?

9. What are all the associated fees?

10. What if I am unsure about the terms after the loan goes through?

Secured and Unsecured Loans: What is What?

If you have been shopping around for a loan you have probably heard the terms unsecured and secured loans. Do you know the difference? Do you know which type that you need? Do you know which type you would qualify for?

It’s difficult many times for the average consumer to wade through all of the terminologies and has a real idea of what they need. Secured and unsecured loans can be broken down into really simple terms for you.

Unsecured loans are those that do not need to be secured by anything, such as your home. With these loans, the lender believes that you will be able to repay the amount as promised. Unsecured loans are not difficult to come by, but you do have to have a good credit history, a low debt to income ratio, and you need to be able to provide your financial stability.

There are many different types of unsecured loans such as personal, student, personal lines of credit, and even some home improvement loans.

Secured loans are different in that the lender requires you to secure the loan with something, such as your home or your car. What this means is that you are providing collateral to the lender, which means if you don’t pay they have rights to this object. Secured loans are more common as many people don’t have the credit or the funds to get an unsecured loan and for many, these are more appealing because they feature lower interest rates.

Lenders like these loans because they have some security in the fact that you will repay. Some examples of secured loans are home equity, home equity line of credits, auto, boat, home improvement, and recreational vehicle loans.

What type of loan is best for you depends on what sort of loan you are looking for? If you just need a personal loan for a couple thousand dollars to pay off a couple medical bills you may be able to do an unsecured loan if you have a decent credit history and you have a low debt to income ratio.

If you want to buy a home, then you are looking at a secured loan. This doesn’t mean that you need to put up collateral to buy the home, the home is the collateral. What this means is that if you don’t pay on the loan than you lose the home.

The same can be said for a car loan, for a new or used car. When you buy the car with the loan you are securing them with the car, agreeing that if you don’t pay them you will have the car turned over to the lender.

Secured and unsecured loans lend themselves to different things. In most cases, those life-changing purchases such as homes and cars are secured and everything else may fall under unsecured if you have the credit history to back it up. There are pros and cons to both types of loans; you simply need to choose the variety that is best for you.

Secured loans vs Unsecured Loans

A secured loan is money you borrow that is secured against an asset you own, usually your home. The interest rates tend to be cheaper than with unsecured loans, but it can be a much riskier option so it’s important to understand how secured loans work and what could happen if you can’t make the payments.

Secured loans are often used to borrow large sums of money, typically more than £10,000 although you can borrow less, usually from £3,000.

The name ‘secured’ refers to the fact that a lender will require something as security in case you cannot pay the loan back. This will usually be your home.

Secured loans are less risky for lenders, which is why they are normally cheaper than unsecured loans.

But they are much more risky for you as a borrower because the lender can repossess your home if you do not keep up repayments.

There are several names for secured loans, including:

  • Home equity or homeowner loans
  • Second mortgages or second charge mortgages
  • First charge mortgages (if there is no existing mortgage)
  • Debt consolidation loans (although not all of these loans are secured)

Unsecured loans explained

An unsecured loan is more straightforward – you borrow money from a bank or another lender and agree to make regular payments until it’s paid in full.

Because the loan isn’t secured on your home, the interest rates tend to be higher.

If you don’t make the payments, you might incur additional charges. This could damage your credit rating.

Also, the lender can go to court to try and get their money back.

This could include applying for a charging order on your home – although they should make clear upfront, whether or not this is part of their business strategy.

Some loans might be secured on something other than your home – for example, it could be secured against your car, or on jewellery or other assets that you pawn, or you could get a loan with a guarantor (such as a family member or friend) who guarantees to make repayments if you can’t.