A homeowner loan is a kind of loan which is available to people who own their homes. When a person intends to take on a homeowner loan, what are the things that he must know first?

Owning a home is an advantage for a person because he can apply for a kind of loan which is available only to homeowners. This kind of loan is plainly called the homeowner loan. Some homeowners avail of this loan while others wait for a more appropriate time to use this kind of loan. But what, exactly, is the homeowner loan?

Distinguishing Homeowner Loans from Other Loans

The homeowner loan is a secured loan. A secured loan is a kind of loan which requires collateral. This collateral can be stocks, bonds, valuable personal belongings, and, in the case of homeowner loans, the house. The exact opposite of the secured loan is the unsecured loan. This unsecured loan does not need collateral.

However, the majority of secured loans taken by borrowers are loans that are secured to the homes. This is why some lending companies immediately assume that a person applying for a secured loan is actually applying for the homeowner loan. Other people even interchange the two terms