Home or homeowner loans are a borrowing option open to most home owners. They are considered a secured loan, allowing the borrower to access some of the equity in their home. As with any loan, it’s important to check out different lenders and programs to find the option that best fits your individual needs.
What Is A Home Loan?
A home owner loan is not the same as your original mortgage, it is an additional loan that allows you to borrow money based on the equity in your home. This type of loan is usually easier to obtain than a regular mortgage and often processes more quickly. Because they are secured by your home they usually carry more attractive interest rates and terms than unsecured loans.
How Do I Know How Much I Can Borrow?
Your lender will work with you to determine the maximum amount you can borrow through a home loan. They will consider factors such as the value of your home, the amount of the outstanding mortgage, and other debts you are currently carrying. They will use this information to put together a loan package for your consideration. Most lenders will lend you a percentage of the value of your house, with some even going as high as 125% of your home’s value.
What Can I Use It For?
Money you borrow through a home loan can be used for almost any purpose. You can use it to purchase a car, pay for a child’s education, renovate your home, buy a boat, or go on holiday, among other things. Remember, though, that you are borrowing against your home so it’s important not to overextend yourself and put your house at risk.
- - How have Britons financed the billion of pounds spent on home improvements this year? Mostly through personal loans, although other forms of payments have been used as well.
Advantages Of A Home Loan
There are many advantages to taking out a homeowner loan. It is a relatively low cost way to finance major purchases or home improvements, and the money comes with very few restrictions. A home loan can usually be processed and closed very quickly, and the fees associated with it are often much less than with other types of loans. Most home loans can be repaid over a longer term than an unsecured loan, and you have the option of clearing it early if your finances are sufficient.
Disadvantages Of A Home Loan
Because homeowner loans are relatively easy to obtain, it can be tempting to overspend with the money you borrow. Remember, this is not free money and you are literally borrowing from the value of your home. It’s best to use the money for things that are good investments either in the home itself or in the future of your family. Common examples of things that are considered good investments include home improvements, renovations, and a child’s education.
We hope in this section to guide and inform you of the pitfalls of getting a UK home loan. Which lender will give you the best deal and who will charge you the most. Here are our top five concerns that you need to look out for when making the decision of who lends you your home loan.
Where Can I Find A Homeowner Loan?
There are a large number of lenders who offer homeowner loans. The first step is to check with the holder of your existing mortgage, as lenders often have preferred rates and terms for existing customers. The loan process may also go more quickly through your existing lender as they already are familiar with your patterns of repayment and responsibility.
Even if your current lender has a great offer, it’s a good idea to check out other lenders as well. There is a great deal of competition in the home loan market right now so don’t be afraid to look around to ensure you get the best deal available for you.
If you are a homeowner and you’re looking for a loan, consider a homeowner loan as a borrowing option. Such a loan will generally come with a favourable interest rate and repayment terms because it is secured against your home. Additionally, the process will usually proceed quickly and smoothly if you have already demonstrated your ability to responsibly handle debt.
Latest Homeowner News
- Avoid devaluing your home with shoddy DIY [02.04.08]
Experts have been sending out warnings to homeowners with bags of enthusiasm but very little skill when it comes to DIY – don't carry out any work over the holidays or you could shave thousands off the value of your home!
- Further controversy over HIPs erupts [05.02.08]
According to a recent report there is now further controversy over Home Information Packs, which are a legal requirement for any residential property that is being marketed for sale in England or Wales.
- Brokers are pushing thought unaffordable home loans [04.12.07]
According to a recent report released by the UK's financial regulator the Financial Services Authority many brokers are pushing through home loans that are simply unaffordable.
- About HIPs [22.11.07]
Earlier on this year the government in the UK introduced HIPs, or Home Information Packs. These HIPs have to be provided by the vendor or agent for any home of three bedrooms or more that goes up for sale in England or Wales.
- Fast Track Extensions On The Way [16.06.07]
Home improvement programmes abound on television these days – and they make it look so easy! Planning permission issues, if mentioned at all, are normally dealt with in ten seconds flat – even if it might have taken months, it doesn’t seem that way.
How have Britons financed the billion of pounds spent on home improvements this year? Mostly through personal loans, although other forms of payments have been used as well.
- Your Home as Collateral For Other Loans
When you become a home owner you immediately open up more doors for yourself in terms of being able to borrow money to make things happen. It might be a business idea or an investment opportunity, but buying into property can open more doors than you might think.
- - For those with good credit, a mortgage in decent standing, and a
relatively (depending on the bank's definition) sizeable difference
between a home's worth and the balance of a mortgage, a home equity
line of credit may be a good option for those needing a loan