Homeowner loans which are also called secured loans used to be one of the most common ways for homeowners to borrow
One of the reasons for this was due to the fact tht secured loans could be used to do or buy anything as long as the purpose was legitimate. Secured loans and remortgages had and have this all purpose usage in common.
Homeowner loans are also good when used as consolidation loans where by all debt in personal unsecured loans and expensive credit cards are cleared off leaving a cheaper consolidation loan repayment in place.
Homeowner loans were extremely popular with self employed homeowners who in the past could use a self cert. to prove their net profit with no official proof needed. They only stated their earnings on a bill head.
Those who owned their home with none or very little equity could obtain a secured loan as there were 125% equity plans offered by a number of secured loan lenders.
These secured loans were obtainable at loan values of up to 60,000.and this is a lot to borrow with little equity to offer as security
This all changed and the number of secured loans applied for and accepted fell by over 80%, as one lender and one broker after the other exited the market.
The ability to borrow at 25% more than the property value ended, and self certs were banned.
The first important change is in the accepted LTV, which during the recession went down to 80% for employed borrowers and 70% for self employed people.
Things for secured loans is now at last improving with new products entering the market which is hopefully the start of things returning to semi normal.
The first change is the slackening off of equity margins which had been reduced to 70% for self employed and 80% for the employed.
Loan to values has now been raised from 70% for the self employed to 75% with the same 5% increase available also for employed borrowers.
The second bit of good news is the re appearance of self certs at 60% LTV
These new self employed loans along with the increased LTV hold out new hope for secured loans.
Learn more about secured loan. Stop by Champion Finance’s site where you can find out all about remortgages and what it can do for you.