A guide to homeowner loans

Although the housing market has slowed in the UK in recent years some areas continue to beat the trend, meaning, those fortunate enough to live in those areas are benefiting from growing equity in their home. This is potentially good news for companies who specialise in homeowner loans because there is an opportunity to sell secured loans to consumers wishing to borrow against their home. It is worth remembering however, that if house prices fall, there is a danger that the equity in the home falls, in some instances a negative equity situation can arise, for example the loans secured on the home are greater than the value.

For those wishing to apply for a homeowner loan, the company or broker concerned will typically ask questions such as are you a homeowner?, have you held a mortgage? Employment status and annual household income. Depending on the lender it is likely a credit history check maybe performed with further questions regarding any bad credit problems.

Homeowner loans that are secured on fixed assets such as property  are generally cheaper in terms of interest rate APR’s charged compared to unsecured personal loans, however, the loan is secured on your property which means if you default, your home is at risk and could be repossessed.