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They are alternative phrases for the same thing. You have to be a homeowner and that is because the loan is secured against your property i.e. your property is an asset that is used as collateral for the loan. In the event that you were to default on the loan (e.g. fall behind with repayments) the lender could (ultimately) demand to sell your property to recoved the value of the outstanding debt. Hence, by securing the loan against your property the lender is relieved of any financial risk of making the loan.
A secured loan is a "second charge" loan. This means that your property must already have a mortgage attached to it. So, to get a homeowner/secured loan you need to be a homeowner with a mortgage.
A homeowner loan is a loan secured on your property, which is why you need to own your home. A personal loan is judged solely on your personal circumstances and you do not need to own your home. Hence personal loans are in principle available to everybody. Regardless of the type of loan you will need to demonstrate that you are able to afford the repayments on your loan.
The most important difference between these 2 types of loan is to do with loan values and repayment periods. With a homeowner loan secured on your home you can in principle borrow a lot more than you can with a personal loan. Typically personal loans are capped at £15,000 to £25,000. However a homeowner loan could give you access to a loan in excess of £250,000. The maximum amount depends:
Personal loans have a maximum repayment period of 7-10 years whereas it can be 25-30 years for a homeowner loan.
You can use a homeowner loan for any purpose you wish. With loan values averaging £28,000 the typical purpose is likely to be one of:
Interest rates are typically lower than for a personal loan because you provide your property as security. Rates can be as low as 6 - 7% for loans with a low LTV. Rates can be fixed or variable. There are typically no upfront costs. To estimate what a homeowner loan might cost you use our loan calculator
A homeowner loan is a second charge loan. A mortgage is a first charge loan. If you don't have a mortgage then by definitiion you cannot have a second charge loan. If you have had a mortgage and repaid it already then you can choose to remortgage your property to release a portion of its value. This has the same effect as as homeowner loan, but because it is a first charge loan there is more administration to set it up. It will take 4 to 8 weeks to complete (compared to 2 or 3 for a homeowner loan).
LTV stands for Loan to Value. It is a term coined by lenders to describe the maximum loan (mortgage + secured loans) on a any property related to the proprty's value. So, if a property is worth £200,000 and a lender has a maximum LTV of 80% then the sum of mortgages and secured loans cannot exceed £160,000 (£200,000 x 80%). If the mortgage is already £100,000 then the secured loans cannot be more than £60,000 (£160,000 less £100,000). The higher the LTV the riskier it is for the lender and the higher the interest rate is likely to be.
In principle we have lenders who can offer in excess of £250,000. The amount will depend on your property's value, the lender's LTV rule and your ability to repay the loan. You will need to be able to demonstrate to the lender that you can afford the repayments. Repayments can be spread over an extended period - perhaps up to 30 years. While repaying over a long time frame can reduce your monthly payments it does mean that you could end up increasing the total amount you repay. We would recommend you seek to repay the loan over as short a time frame as you can afford and to only borrow the amount you really need.
We work with the UK's largest and most trusted homeowner loan partner. They offer a 5★ service. It's FREE to find out what your loan options are, and to do this all you need to do is complete our simple & secure enquiry form. You'll then be contacted by our partner to discuss your requirements in more depth. You are not under any obligation to proceed with any loan offer made to you.
If you own a property and it has equity a lender should be prepared to lend to you. This is as long as you can demonstrate you can afford the repayments. If you have defaulted in the past it may still impact the rate you can get. A lender will not lend simply because they know they could repossess your home if you fail to meet your obligations. But, you should have a better chance of getting the homeowner loan you need than the alternative of a personal loan, for instance. Some lenders also offer special plans which might be of interest.
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 OTHER LOAN 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
* Actual rate will depend on personal circumstances and credit assessments. To find out what rate you can get apply below. The current Representative APRC is 9.1%, including lender and broker fees.
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