A homeowner loan is an affordable borrowing product that is secured against an applicant’s property. Often referred to as secured loans, this special type of finance is only suitable for people with mortgages or for those who own their home outright. If you have ever applied for an unsecured personal loan in the past and found that your application was turned down then a secured homeowner loan might be the only available option.
How much money can I borrow?
Most homeowner loans are available from £20,000 to £200,000, although the actual amount will vary based on the individual lender you choose to borrow from. When you apply for a secured loan, the amount of money you can borrow will be directly affected by the level of equity you are able to offer. This is the amount of money left over once the outstanding mortgage amount owed on your property is deducted from its open market value. Of course, your personal circumstances and borrowing history will influence the amount you can borrow whilst also affecting the rate of interest you will be charged.
What advantages can a Homeowner Loan offer?
There are many good reasons to choose homeowner loans over other types of borrowing products and here are some of the more common advantages.
You can borrow more money
When you apply for a secured homeowner loan through Secured Loans UK, the borrowing limits are typically set between £20k to £200k. If you are looking to consolidate a large number of debts or pay for extensive home improvement works such as a new kitchen and bathroom, a loft conversion or an extension, an unsecured loan may prove to be inadequate. A secured homeowner loan will enable you to easily cover the cost of improving your property whilst leaving you with additional funds for other things in life.
You can borrow for longer
If you are borrowing a significant sum of money and you need extra time to pay it back then a homeowner loan will provide all the flexibility you need. It is not uncommon for borrowers to choose repayment terms stretching from 10 to 25 years in some cases, although you will obviously have to pay more interest as the duration of the product lifetime is increased.
The rate of approval is much higher
If your credit history is less than perfect or you are self-employed and have found it difficult to get a loan in the past then you will be glad to know that secured borrowing products such as a homeowner loans have a much higher approval rate. As the loan itself is secured against your home, the lender is much more likely to say yes to your application. However, it is important to realize that your property could be repossessed and sold by the lender should you find it difficult to make the repayments on time for a number of consecutive months.