Find your own mortgage with a little (free) help from Teito!
A homeowner loan is a debt secured on your home that is separate to a mortgage.
Because they are secured on a home, they are only available to homeowners with a level of equity, which is why they can also be called home equity loans. With a homeowner loan, you continue to pay your mortgage as they are maintained separately.
Our team of experienced advisors have helped many people to get a great deal on a homeowner loan. As a whole-of-market broker, we work with many lenders to get you the best rates possible.
To get started, complete our simple online form today, or keep reading to learn more.
Your homeowner loan lender will assess the value of your property and secure the loan against your home as security.
A few points to make:
The amount you will be able to borrow with a homeowner loan will depend on a range of criteria.
All lenders will have different eligibility and affordability requirements, but generally, they will consider:
While it is not impossible to get a homeowner loan with bad credit, it is less straightforward.
We have helped many people with bad credit to get a homeowner loan. There are many reasons why you might have bad credit, ranging from missing a few payments through to IVAs and bankruptcy.
There are a few things you can do to improve your rating before making an application, however, it can take a few months before you see real improvements to your credit score.
Your income will play a role in the lender assessment of your homeowner loan application.
If you have a stable income, you will be deemed as lower risk in comparison to someone whose income varies, for example, if they are self-employed or are paid mostly in commission.
Self-employed people are generally required to provide a minimum of three years of trading history, however, some lenders will consider less.
Our advisors can help to recommend the best lenders, depending on your situation.
Being retired doesn't preclude you from getting a homeowner loan.
Assuming the lender is confident in your ability to make repayments long term, you are likely to be eligible. While some lenders have a maximum applicant age limit of 75, other lenders go beyond 80.
Generally, lenders for homeowner loans will require ownership for a minimum of six months before agreeing to a loan.
If you have minimal equity in the property, as is typical for many first-time buyers, you may be deemed as higher risk. Get in touch with one of our advisors to learn more.
While it is more complicated to secure a homeowner loan against a non-standard property, it is not impossible.
Non-standard properties, for example, those with thatched roofs or listed buildings, are more niche and therefore are deemed more challenging to sell. As a homeowner loan is secured against the property, non-standard properties are seen as higher risk, meaning there is a reduced pool of lenders available.
Our advisors can help you to find the perfect lender for your non-standard property.
You may find it more challenging to get a homeowner loan on a property without a mortgage or secured loan already against it. This is because they tend to be secured over the top of a first charge mortgage. If this is your situation, let our advisors help.
Homeowner or equity loans are used for a range of purposes.
Many homeowners with debt can use a homeowner loan to consolidate their debt, which can provide a lower interest rate than unsecured loans. You may find that if you have bad credit you are offered a less favourable rate, with a reduced Loan to Value offer.
Home improvement activity is the other main reason why people go for homeowner loans. If you are planning an extension or garage conversion, for example, you may decide to get a homeowner loan to fund the development.
It is possible to get a homeowner loan on a buy-to-let property.
However, the pool of willing lenders is reduced as buy-to-let properties are seen as riskier. For more information, get in touch with one of our team who can help you to find the perfect lender.
As a homeowner loan is secured on your property, if you fail to make repayments, there is a risk that your home will be repossessed.
A homeowner loan comes second in terms of the order of payment if this happens. This means that your mortgage will be paid from the proceeds of the sale first, with the homeowner loan being paid second.
If there is not enough cash generated from the sale to cover both the mortgage and the secured loan, you may have to enter into an IVA or declare yourself as bankrupt.
There are a few alternatives to consider when deciding on a homeowner loan.
The obvious option is to remortgage. You might be able to find a better mortgage deal that frees up the cash you need without entering into a new loan agreement.
You could also consider a personal loan or 0% credit card depending on the level of spend, which will not be secured on your property.
Our team of advisors are waiting to hear from you, complete our simple form today to get started.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.