Homeowners are a home loan that apply solely to those who actually own the home in which they live even if there is still a mortgage in place.
Homeowner loans are also called secured loans as they are secured on property.
Secured homeowner loans are in fact secured on the equity that is available on the property, and for the uninitiated equity is the balance between the value of the property and the outstanding mortgage.
If a property is worth £250,000 and the mortgage secured on it is £the available equity isAs there are no longer 100% equity plans available a homeowner loan of £100,000 is not possible on these figures100,000.
Pre credit crunch there was availability of homeowner loans at 100% LTV.
Now the maximum secured loan for homeowners is 70% for self employed borrowers and 80% for those in employment. This being the case the maximum available loan for a self employed applicant based on the previous example would be £25,000, and for the latter the maximum available homeowner loan would be £50,000.
For those with the necessary equity on their properties, homeowner loans are an excellent way of funding a vast variety of purchases.
Taking out a homeowner loan to buy a car means that it is not essential to buy from a car garage and buying privately from all the adverts adverting cars being sold privately means that the cost of the car is less expensive.
For the same price as from a dealer ship you may be able to buy a Mercedes instead of a Mondeo, or to purchase a more upmarket model.
Homeowner loans are also a good way of obtaining funds to carry out home improvements, and it is extremely cost effective, as the homeowner loan rates are much lower than the rates offered by the home improvements company with the former having rates starting at about 9% APR compared to the latter at about 25%.
Again, as with the purchase of the car, with having cash in hand to pay for the home improvements it is possible to obtain a bargain for the materials and also the labour involved.
Homeowner loans are often used as a means of carrying out debt consolidation which is when numerous debts in credit cards, personal loans, etc. are combined into the one payment and replaced with a low interest homeowner loan with a fraction of the interest rates of credit cards.
If a homeowner is thinking of making an expensive purchase, such as a motor home, a homeowner loan can be the best method, as homeowner loans can be taken out over as long a period as twenty five years making the repayments affordable to many people.
A homeowner would look far to find a better type of loan than the secured homeowner loan.
It is not even worth a homeowner considering any other form of loan other than of course a remortgage as remortgages can be used in the exact same way as secured loans and they have interest rates starting from 1.84%.
Author Resource:
Trust Champion Finance when it comes to homeowner loans and whole of the market mortgages an remortgages. They have been established since 1985, and also arrange debt advice, debt help, debt consolidation, debt management and all debt solutions.
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