Home owner loans

1. What are home owner loans?

Home owner loans are specifically design for those people that own their own homes and want to borrow money against any equity that they may have built up in their homes over the years they have lived there. Equity is difference in the value of the home and what is actually owing on your mortgage. Always remember to seek professional advice when dealing with US or UK mortgages or loans.

2. Why is it important to own a home to acquire one of these loans?

It is important that the borrower own his/her own home so that the lender of the money can have the security of using the equity to place against the loan of the money that he is giving. Without a home there is no security for the loan, which places the lender at a higher risk of getting his money back.

3. Why have home owner loans become so popular in today’s market?

This is due to the tax deductions and low interest rates that are offered today’s housing loan market. It is also due to the fact of the amount of equity people have built up in their homes over the years, which can now be used by them in a safe manner. You can see how popular these types of loan and mortgages are by simply looking at the amount of mortgage brokers in london – there are over 300!

4. How does equity build up in a home?

If you purchase a home for $100,000 and you paid $20,000 as a down payment and have paid, a total amount of payments of $10,000 then you have a total amount of $30,000 in equity but there is also another factor that the lenders consider, suppose your home as increased in value on the market and not would sell for $120,000, this changes your equity to $50,000 and this is what you would use to secure a home owner loan.

5. What rates of interest are there for home owner loans?

The rates of interest for home owner loans vary between companies but with a home owner that has a lot of equity built up in his home you can be sure you will get your loan at a very good rate. As in anything you purchase it pays to shop around for the best possible deal.

6. Why would I get a home owner loan?

The reasons for getting a loan such as this are as diverse as there are people who seek the loan. Some people borrow the money to pay down the smaller bills they have accumulated over the years when they find it’s a struggle to make the payments, others invest the money In home improvements which also improves their equity while others use it for a vacation of a life time.

7. Can I afford another payment?

If you are taking out the loan to pay of the small bills you have acquired you will find it a lot easier paying one monthly payment than the four or five you were paying on small loans. However, there is a catch to this. If you are borrowing to pay off the bills, you have it would be a bad mistake to run those bills up again before paying off your home owner loan, you can find yourself in a bit of a bind as you have already used up your equity.

8. What would happen if I can’t pay this loan?

Anyone that gets a home owner loan has to be careful. If you can’t make the payments on this loan the bottom line is the lender can foreclose on your home. This only happens in very extreme cases. Today’s lender doesn’t really want your home and would rather work out payments you can make without stressing your budget.

9. How can a lender help if I default on payments?

A lender can help in stretching your payments out over a longer period of time, which would really reduce your payments into payments you can handle. Although it will take you longer to repay the loan and cost you more in interest it is a good way to help a borrower get out of a bind.

10. How long would it take to get a home owner loan?

This type of loan takes a little longer than a personal loan as the lender has to make sure the equity is in your home so therefore they have to check this out. There are mortgages to look over and the increase in the value of your home. This all takes time but maybe not as long as you would think in today’s world of technology.

Always consult a professional financial advisor, mortgage broker or independent advice agent when dealing with money matters. To find your Local Financial Advisor visit: FinancialAdvisorFinder.co.uk

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: