Homeowner Loan

Homeowner loans are exactly what they say, a loan for a home owner. The reason it is called this is because the lender asks for security against the money borrowed and generally it is the home that is put up as collateral, hence the term 'homeowner loan'. Loans secured against property that has a mortgage are known as second charges. Loans secured against a property owned outright with no existing mortgage in place are known as first charges.

The advantages of a home owner loan are that the interest rates tend to be cheaper than an unsecured loan because there is less risk of default of payment. Also, it is easier to obtain a homeowner loan or secured loan if you have a bad credit history as there is security against the debt.

Homeowner loans can be obtained from high street banks, building societies and specialist lenders. They can be used for any purpose such as home improvements, consolidation or even a once in a lifetime holiday or a wedding.

The value of the homeowner loan will depend on your income and the current value of your home. This can be anything from £3000 to £100 000. There are various terms that a homeowner loan can paid over, typically three years up to 25 years.