You are here: Home > Mortgages > Mortgage News > Mortgage articles
Homeowner loans and secured personal loans
Homeowner loans are a type of loan popular in the UK where your home is used as security to the Lender for the money you borrow. In other words, if you don't pay back the loan, the Lender can, in extreme circumstances, sell your house in order to recoup any losses. Homeowner loans are also known as secured personal loans, second charge loans or second mortgage loans. How much you can borrow with a homeowner, or secured loan depends on how much equity is in your house (the difference between your mortgage and the property's value). While the lender benefits from the peace of mind of knowing that the loan is secure, there are many benefits to the consumer of homeowner loans.
The advantages of a UK homeowner loan
Firstly, compared with unsecured loans, UK homeowner loans tend to be faster
and easier to arrange. As a homeowner, you can borrow against the value in your
home without spending your equity. What's more, while exact terms will vary,
most homeowner loans don't require upfront legal, survey and other fees.
With a homeowner loan, you can keep your current mortgage, so you don't need to remortgage in order to realise the value of your equity and homeowner loans usually have a lower rate of interest than unsecured loans. Interest rates for homeowner loans will depend on how much you want to borrow, the repayment period and your financial circumstances, such as your credit record including any mortgage arrears and CCJs, proof of income and employment status.
What could you do with a homeowner loan?
Homeowner loans can be used for any purpose. You can use the money to
consolidate and reschedule existing debts, pay off overdrafts and credit cards
or simply to treat yourself to a new car, holiday, home improvements or anything
you choose, by turning your equity into an asset with a homeowner loan.
Bookmark with:
Facebook
Delicious
Digg
Reddit
Stumbleupon