Homeowner loans are types of loans for which tenants are not eligible and only people who own their own home can apply.
Homeowners can apply for either an unsecured or a secured homeowner loan. Before the advent of the credit crunch it was relatively easy for a homeowner to obtain an unsecured loan, because if the borrower defaulted on payments the loan lender could place an inhibition on the property.
An inhibition, as it is a form of security is placed on the Land Registery, and if the homeowner wants to sell up and move house the inhibition has to be payed off and the funds at last go to the loan granter.
Now with the shortage of funding available it is almost impossible even for a homeowner to obtain an unsecured loan, unless he is absolutlety blue chip. That means someone who has lived at the same address for a number of years and is on a good salary in a job that he has been in for several years.
Therefore in the present circumstances if a homeowner wants a loan the secured homeowner loan route is the way to go.These secured homeownr loans require a type of security as guarantee, and when talking about homeowner loans the asset is the property.
Before the crunch 125% equity loans were available which meant that homeowners with little or in fact no equity in their property could obtain fairly large secured homeowner loans. This was rather fool hardy, and when house prices started to follow the situation became dire for the secured loan lenders concerned.
The situation regarding equity is very different now, and the 125% equity secured homeowner loan is a thing of the past and equity margins are now 70% for self employed borrowers and 80% for the employed.
Homeowner loans have really gone from one extreme to the other. Secured loans are now too difficult to obtain whereas before the recession the underwriting criteria was often too lax.
It is to be hoped that the fate of the homeowner loan will change and that a lender will appear who is willing to grant up to 90% LTV homeowner loans.This will kick start this finance sector before it is too late.
Want to find out more about secured loans, then visit liz’s site on how to choose the best homeowner loan for your needs.