What are homeowner loans?

keWhat is a homeowner loan?
If you own your home, there is an additional loan option available to you. In addition to personal loans, there are also loans that are secured against your home. Because your home is used as security for repayment, these secured loans are also commonly referred to as homeowner loans.
Although different types of security are used for different loans in the consumer loans market place, in the majority of cases secured loans refer to loans where the loan is secured against your home. It is for this reason that the terms secured and homeowner loans mean one and the same thing.

What are the advantages of a homeowner loan?
By using your home as security against the loan you may be able to borrow more money than you could with a personal loan. Personal loans usually cater for loans of up to £25,000 while homeowner or secured loans are required for larger amounts. Having the security of the value of your home also means that lenders can rely on something other than just personal credit history to determine whether you will repay your loan. This means that people who are self employed or have experienced a bad credit history in the past will often still be considered.

Is my home at risk?
Yes. If you default on your re-payment you could lose your home. So, think very seriously before taking out a homeowner loan.

What should you consider?
Will I still be able to cover the repayments if I am going through a rough time financially?
Is the purpose of the loan worth risking the loss of my home for?
If the loan is being used to consolidate existing debt, have you made the necessary plans to ensure that all avenues of the existing debt are controlled to prevent a similar situation from arising again?