Being a homeowner means that you can benefit from lower loan interest rates!
If there wasn’t a better incentive for owning your own home, how about lower interest rates when you take out a home owner loan? Just over 70% of us now own our home, which isn’t bad at all when you consider how difficult the rocketing house prices have made it for first time buyers to step on the property ladder. This still lags behind European levels but as average house prices are still continuing to increase, despite the cooling of the market in late 2004, this is enabling us to release the significant amount of equity we have in our property and use it for other things.
A homeowner loan or secured loan as it is otherwise known can be used as you see fit. For example you could use the home equity to consolidate debt, purchase a car or even go on a dream holiday. The choice is yours!
Low down on a homeowner loan to keep you in the know:
| | 1. The home loan will be secured on your home as a second charge, after your mortgage. This does mean that your home is at risk of house repossession if you do not keep up the repayments.
2. Your home will have to be valued as the lender will have to determine how much your property has improved in value since you purchased it. They need to make sure there is more equity in the property than the original mortgage amount.
3. As this is a secured loan, you will benefit from low interest rates, lower than if you took out an unsecured personal loan. Obviously this does depend on your personal financial history but in general terms, this is the case.
4. These loans are generally used for lending large sums of money, typically over £5,000. If you need less you should consider an unsecured personal loan as this will not put your home at risk.
5. These loans can have a term of around 25 years, so you will have plenty of time to pay it back.
6. A home owner loan normally has a variable interest rate so your monthly repayments can increase. |
What other terms can a home owner loan be known as?
| | 1. Secured loan.
2. Home loan.
3. Home improvement loan.
4. Home equity loan. |
Where can you obtain a home owner loan from?
As with a home improvement loan, your current mortgage provider should be your first port of call but you should always compare what they offer you with other home owner loans from specialist providers, many of which have online application forms. You should also consider talking to brokers. Follow the link to review some companies that offer home owner loans at cheap rates.
