Homeowners have an advantage when applying for a loan. The reason is that they use their home as collateral to secure the loan. A homeowner loan can be a good alternative for those individuals who do not want to sell their home as way to secure money they need for projects they want to complete. As a homeowner in the UK, you can apply for a loan pertaining to the equity you have in your home. The loan will be secured on your property and the transaction will not impact your existing mortgage in any way. This type of homeowner loan is one of the more popular options in the UK, because the borrower gets the best interest rates, but is also able to take on larger loan amounts.

The difference between a first and second mortgage

If you already have a mortgage on your home, then any other loan that is secured on the same property is commonly referred to as a second mortgage. A homeowner loan (secured loan) is when you borrow against the equity you have built in your property. You put up for the lender this collateral and as the borrower benefit too by having lower interest rates to deal with. Defaulting on your payments could mean that you lose your home. You can use the monies from your homeowner loan for anything you would like such as; home improvements, a holiday, buying a car, or paying off debts, provided the lender is satisfied that there is adequate value in the property to provide sufficient security for the loan. This typically means that the property will have increased in value from the time when it was purchased, so there is additional equity or value that can be utilized.

Homeowner loans are often provided by finance companies. If you are taking out a second mortgage on your property, remember that the lender will most likely impose a higher rate of interest because the first mortgage lender as a rule holds the deeds for the property and has priority in reclaiming any unpaid debt.

Looking for a large amount of money without selling your home?

A homeowner loan is appropriate if you want to raise a large amount of cash; are having difficulty getting an unsecured loan; or have a poor credit history. Lenders are more flexible underwriting a secured loan making it possible to be approved when you may have been turned down for an unsecured loan. The rates of a homeowner loan vary depending on your financial circumstances. Be sure to look closely at your budget before deciding on the lender who will provide your homeowner loan. Over extending yourself financially can result in the loss of your home.

In conclusion, if you are looking to borrow from