Home Loan
A 'home' loan or 'home-owner' loan is a type of loan that is available only to people who own their home (with or without a mortgage), where the property itself is used as security for the benefit of the lender. This is sometimes called a 'secured' loan, because the debt is said to be secured on the property.
The main benefit of a home-owner loan is that the rate of interest charged on the amount borrowed is usually much lower than for other types of loan that are 'unsecured', such as a store or credit cards. But the disadvantage is that if the borrower fails to keep up with the monthly payments, their home is at risk because the lender can take possession of the property and sell it in order to recover the unpaid debt. Anyone thinking of taking out a home loan needs to think carefully about both the advantages and the disadvantages, because this is a serious legal commitment.
Provided you own your home, even if there is in an existing mortgage, you can apply for a homeowner loan. The lender will check whether the current value of the property is high enough to cover the new loan. If you already have a mortgage, then an additional loan that is secured on the same property is known as a 'second charge' or a 'second mortgage'.
The money you borrow as a home loan can normally be used to pay for either home improvements or anything else you need, such as a car or holiday, but the loan must still be repaid according to the terms of the loan agreement and you need to keep up your monthly payments just like your main mortgage.
If you would like advice and help with getting a home loan, just complete the quick form opposite and one of our panel of advisers will contact you direct to discuss your personal requirements in confidence.
These notes are offered as a general guide only and do not constitute legal or financial advice.
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THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED AGAINST IT.
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