Buying a home is one of the biggest investments in life. The amount used to purchase the home is available as equity. When a house is mortgaged, the installments we pay back gradually build up the home equity for us. Real estate prices are not static, they rise or fall by keeping up with economic indicators. As a result, the value of the home’s assets also rises and falls. Any loan taken out against that home or property that we own is called a home secured loan. As the name suggests, the home secured loan uses the home as collateral.
In our busy and demanding lives, we are often faced with a situation where our monthly income and the bank balance we possess are horribly insufficient to fund some financial need. It could be mounting debt that requires urgent consolidation, buying a new car, escaping on that seven-star cruise, buying a new speedboat, getting cosmetic surgery, or a medical emergency. We need funds and they just aren’t available. When we become aware of the stark reality that the only thing that can save the solution for us is a loan, we turn to the lenders. The lenders, driven by their interest in profit and security of the loan amount, require security. Finding comfort in owning a home through the borrower, they happily lend against the available home equity.
Home secured loans are gaining popularity among both borrowers and lenders. These loans are available to UK citizens who own their own home and are between the ages of 18 and 65. Lenders offer a wide range of amounts as mortgage loans. Lenders are comfortable giving amounts equal to the value of the collateral. If the collateral is of high enough value and the borrower has a good credit history, they can get a loan amount of £1 million very easily. The repayment period of such a loan is also quite long. The borrower can repay the loan between 3 and 30 years, which together with the fact that a security is offered, drastically lowers interest rates on such loans.
People with bad credit also find it easy to get a secured home loan and can use it to improve their credit score. The application process for a home secured loan is quite simple and can be done from the comfort of your home or office. Most lenders now offer an online application process, which saves time for both parties. A borrower can also apply over the phone, by calling the credit bureau, or by asking a representative of the lending company to visit them. Any lender, no matter how comfortable they may be with the collateral, will opt for the borrower’s credit check. He will use credit bureaus, your payslips, work history and bank balance to get a clear picture of your financial health. The entire process of getting a secured home loan approval takes between 2 and 4 weeks. During this time, a real estate consultant visits the borrower to assess the collateral. The signing of the legal contract between the borrower and the lender will most likely be the last step before the loan is delivered.
It is in the borrower’s best interest to hire a competent attorney who can interpret and understand the fine print of the loan agreement. Because it is too risky to blindly believe a lender who is already driven by his economic interests.