Are you interest in buying a new car, adding an extension to your home or buying new furniture; or maybe you want to consolidate your debts and you do not know where the money will come from.
If you own a home, you can apply for a home owner loan to help you raise the monies needed to make your dreams come true. The amount you can borrow depends upon several factors but can range from £1,000 to £100,000. The repayment period can be between 3 and 25 years.
How does a home owner loan work?
A secured loan (home owner loan) is advantageous for the home owner in that they can borrow up to 125% of the equity in their home. Since you are placing your home as collateral, this is a form of security for the lender and you benefit by receiving lower interest rates. Even if you have experienced poor credit history, you can apply for a home owner loan because your home is collateral and you are less likely to default on your payments because your home is on the line.
Lenders look favorably upon those who are homeowners as this shows them that you have made a commitment to repay a large amount of money over a long period. As a home owner, you can borrow a large sum of money and receive low monthly repayments. The rates that lenders charge on the amount borrowed can vary from fixed to variable. It is normal that a home owner loan has variable rates. A variable rate will change with the flux of the market and will affect the amount you repay. Typically, a home owner loan will have a tendency to provide a lower rate than unsecured loans due to the fact that the lender has your property as collateral.
What is the lender looking for in a home loan application?
There is a variety of different ways to apply for a home owner loan. The method you choose comes from the research done and the lender you believe is best suited to your financial situation. You can go to your local lender and apply, apply over the phone, or the Internet. When the lender is evaluating your application, they will gather your income and financial commitments to see if you can afford to take on the home owner loan.
Of course, prior to this you should review your budget to make sure you have the financial resources to make the repayments on the loan you desire. The lender will also look at any adverse credit or mortgage arrears and the equity you have built in your property. The majority of lenders require that both of the individuals in a marriage be named on the application form. A lender will also review your credit score, references, and payment history to aid in their decision.
In summary, you can use a home owner loan for any purpose such as, home improvements, a holiday, new car, or pay off debts. Do not forget that your home is at risk if you do not keep up repayments. You may want to inquire as to taking out insurance on your home owner loan in case of unforeseen circumstances render you unable to make repayments.
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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.
