If you've been thinking about applying for a direct homeowner loan, you might want to take a little bit of time to make sure that you understand exactly how these loans work and to shop around for the best deal in a direct homeowner loan.
What is a direct homeowner loan?
So what is a direct homeowner loan? Basically, a direct homeowner loan is a loan that is made between a lender and a borrower directly (in other words, without a middle-man), using the equity in the borrower's home as collateral for the loan.
A direct homeowner loan can be used for a variety of purposes, from vehicle financing to debt consolidation, and can vary in amount from relatively small to much larger.
The equity that the borrower has is a major determination in the maximum amount of the loan.
What is equity?
Equity is a measure of how much of the borrower's home they actually “own”, and is used as collateral to guarantee a direct homeowner loan.
The more of your mortgage you've paid off, the more equity you have… it's basically a percentage of the total value of the home, minus the outstanding mortgage or any loans that are on the house.
The more equity you have, the lower your potential interest rates would be on a direct homeowner loan and the larger amount you're eligible to borrow.
How should I shop for a loan?
Beginning with your local banks and finance companies, start requesting quotes for a direct homeowner loan.
You should get several loan quotes, and would also likely benefit from checking online lending companies for loan rates and quotes.
These online lenders often offer lower interest rates for loans, and can be easily accessed from the privacy of your home at any time of the day or night.
How can I get the best loan for my money?
To make sure that you get the best direct homeowner loan for your money, make sure to get several quotes from both physical and online lenders to compare before deciding on a single loan.
Look at the interest rates, loan repayment terms, and total repayment time before coming to a decision… many of the loan quotes will likely be reasonably close to each other, but a few will likely stand out as better offers.
Compare the best offers, taking into account the difficulty or ease of completing the application process and making payments on the loan.
You might also want to set up a direct draft from your bank account to pay for the loan… not only does this add convenience in having a single payment withdrawn automatically each month, but some lenders will offer you a reduced interest rate for this type of setup.
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About The Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
