Learn All About The Home Owner Loan UK Market
If you need to borrow money and own your own property, then a home owner loan UK could be for you. A home owner loan UK is often called a secured loan as the amount you borrow is secured on your property whether it is mortgaged or owned outright - this means that if you default on repaying the loan you could lose your home.
A home owner loan UK secured against a property that is already mortgaged is known as a second charge, whereas a loan secured against a property owned outright with no existing mortgage in place is known as a first charge.
This is why an advert for a home owner loan UK will include the warning "Your home may be repossessed if you do not keep up repayments on your mortgage."
A home owner loan UK is available in varying amounts and for many different purposes, including debt consolidation. The amount available on a home owner loan UK is usually between £3,000 and £50,000 although some lenders will lend up to £100,000.
The amount borrowed is repaid monthly over a term agreed at the outset, which will usually range between three years and 25 years. You may be charged a penalty if you repay your loan earlier than agreed, and you should check each lender's individual policy with regards to this.
Lenders charge interest on the amount you borrow on a home owner loan UK - this is called the Annual Percentage Rate (APR). The amount you can borrow, the term available and the APR will all depend upon the equity you have in your property, the lender's view of your ability to repay the loan and your personal circumstances.
Quoted APRs on a home owner loan UK will usually be "typical" rates, and these act as a guide only as the exact rate offered will be on an individual basis. Typical rates should be offered to at least two-thirds of the lender's approved applicants.
Lenders also take into account your credit history and any county court judgements or defaults. If you have had credit problems in the past you will probably still be able to get a home owner loan UK but will be charged a higher rate of interest.
When taking out a home owner loan UK you will be asked to sign a credit agreement, which you should read carefully as the terms are legally binding. You will also have to submit documents including ID, proof of residence, proof of ownership of your house and proof of your income.
If you are married or in a civil partnership a lender might insist both parties are named on the home owner loan UK application from. This is because there have been cases in the past where one party took on a secured loan and defaulted - but when the lender tried to force a sale of the property, the other party was able to block it by claiming to be in ignorance of the loan.
Unlike unsecured personal loans which have a fixed rate of interest for the term of the loan, a home owner loan UK will not usually have a fixed rate of interest - the interest rate may vary in accordance with base interest rate moves or at the lenders' discretion.
