Homeowner Secured Loans–The Difference Between Then And Now.

Obviously only homeowners can apply for homeowner loans.

Homeowners can apply for either an unsecured or a secured homeowner loan. Before the advent of the credit crunch it was relatively easy for a homeowner to obtain an unsecured loan, because if the borrower defaulted on payments the loan lender could place an inhibition on the property.

An inhibition, as it is a form of security is placed on the Land Registry, and if the homeowner wants to sell up and move house the inhibition has to be payed off and the funds at last go to the loan granter.

As loan funding of any kind is not very available in the current economic climate unsecured loans are almost a thing of the past unless you are someone who hardly requires a loan in the first place. You would have to be settled as regards your job and your years at the same address to have any chance at all of being considered for an unsecured loan.

Therefore in the present circumstances if a homeowner wants a loan the secured homeowner loan route is the way to go.These secured homeowner loans require a type of security as guarantee, and when talking about homeowner loans the asset is the property.

Before the recession it was possible to obtain a secured homeowner loan up to 125% of the value of the property. This meant that if a property was worth 200,000 you could add up to 25% more than the value of the property which in this case meant that if the mortgage balance was100,000 it was possible in theory to be granted a homeowner loan up to a maximum of 50,000.

This has all changed and the maximum LTV for employed applicants is 80% and for self employed applicants the maximum LTV is 70%.

Homeowner loans were too readily available before the present credit crunch, and two odd years later these secured homeowner loans are too thin on the ground, and many homeowners who have excellent credit ratings are being deprived of the loans they need, and which they can comfortably afford to pay back.

It is to be hoped that the fate of the homeowner loan will change and that a lender will appear who is willing to grant up to 90% LTV homeowner loans.This will kick start this finance sector before it is too late.

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