Some Facts About Homeowner Loans - Secured Loans.
It is only homeowners who are eligible to apply for homeowner loans A.K.A. secured loans.
Homeowners are the only people who are eligible for these homeowner loans as they require to be secured against an asset which in this case is a property. What equity is is the difference between what a house is worth and the mortgage secured on it. To give an example of what equity is that if a property is worth 290,000, and the mortgage is 100,00, the equity is’0,000.
Before the credit crunch secured homeowner loan lenders granted homeowner loans up to 90% LTV , 95% LTV and 100% LTV, and so based on the previous example loans of up to 100,000 were available but also depended on an applicant’s income and status.
Certain secured loan lenders including Paragon, EPF and First Plus even gave secured loans at 25% more than the property was worth. This was acceptable when house prices were rising, but when they started to fall these secured homeowner loan lenders were in serious trouble.
There are no longer such slack loan to values, and the maximum is 80% for employed prospective secured homeowner loan applicants, and reduced to 70% for self employed people.
Before the credit crunch,providing of course there was sufficient equity,secured loans were available up to a maximum of 250,000, whereas now some secured loan lenders are only prepared to grant up to a maximum loan value of 50,000 while other homeowner loan lenders grant secured loans up to 100,000
Homeowner loans can be used for almost any purpose such as to buy a car, motorhome, boat etc.In fact homeowner loans are a very good way to fund such a purchase as these loans enable you to buy a vehicle from a private individual or at an auction, and this can save you a lot of money. If you want to buy a car for example from a dealership and arrange a loan from the dealer to buy a car you will pay more for the vehicle than you would if you bought it in a private sale. Also if you buy from a dealership you will require a substantial deposit of up to 30%, and if you do not have a car to trade in 30% can be a fair amount of money to have to hand. A secured homeowner loan will fund the purchase without the need for a deposit.
If you have a number of debts on credit cards, loans, etc. using a homeowner loan as a debt consolidation loan is a great idea. The debt consolidation loan combines all other debts into one, and you are left in a much better, and easier financial position. A fortune can be saved every month.
Secured homeowner loans can be used to buy a second home either at home or abroad, and as with using a homeowner loan to buy a car it does away with needing a deposit.
This is really only the tip of the mountain regarding secured homeowner loans, and more information is readily available from secured loan brokers.
Want to find out more about secured loans, then visit Champion Finance’s site on how to choose the best homeowner loan for your needs.
