With the Bank of England having lowered the base rate it charges lenders, consumers have benefited as many lenders have passed the savings on to the market. Secured homeowner loans are being promoted at all time lows for many borrowers. Typical APRs are running around 11-12%, while borrowers with excellent credit can find loans below 6 per cent from some lenders.
Secured homeowner loans are a mutually beneficial arrangement for a borrower and a lender. Secured loans are loans in which the borrow puts up an asset, as security, in order to obtain a better rate on a loan, or more money. Homeowner loans that are secured are awarded to borrowers who put their property up as collateral in order to obtain a more favorable loan.
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Lenders are almost always willing to offer better rates and terms on secured loans as there is less risk. If a borrower fails to meet the repayment requirements of the loan, he risks losing the property to foreclosure or repossession by the lender.
Since they do pose a greater risk, borrowers generally prefer unsecured loans when rates and terms are comparable. The reality is, however, most of the time secured loans of any time offer better rates. Some borrowers offer security for a loan simply to get the best rate available, or to increase the amount of borrower potential. Other borrowers are required to, or must use a secured loan, just to get funding from a borrower. Of course, the risk of a secured loan is losing the secured asset.
Regardless of whether a borrower uses secured homeowner loans out of necessity or a desire for the best rate, there are many great opportunities and reasons to do so. Sometimes people refer to homeowner loans and other personal loans as any purpose loans. This is because many lenders, especially if a secured property is involved, will offer a loan for virtually any purpose. Some people use their home equity to borrow for home improvements, car repair, vacations, credit card or debt consolidation, and many other purposes.
There are some guidelines that lenders follow in order to offer secured loans. The amount of the loan is generally based on the value of the property and equity. Some lenders have offered secured loans for as much as 125 per cent of the home's value to good credit borrowers. Loans range from 5,000 to 250,000 pounds typically, with higher equity and good credit leading to more allowable debt.
Working with a specialized loan broker is a great advantage for someone looking for secured homeowner loans. Brokers have great knowledge and access to many great loan products and rates. They also carry a very helpful attitude into customer relationships.
With lender rates on homeowner loans and secured loans at all time lows, there has never been a better time to consider a loan for any purpose. As with any secured loan, borrowers just need to be careful to only borrow a reasonable amount that they can be responsible for.
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