Monday, July 9, 2007

Home loans

Homeowners in UK enjoy a lot of benefits when it comes to availing loans. Lenders approach homeowners with hoards of lucrative loan offers, with low Annual Percentage Rates and added benefits. So, availing a home loan i.e. loan against the equity of your home is not a daunting task in UK.

Secured Home Loans Most homeowner loans are secured ones. The equity of the house pledged by the borrower is valuated and in most cases, 90% of the home equity is given as the loan amount. Some lenders can even go as high as 125% of your home’s value provided you have a good credit history. The Annual Percentage Rates on secured home loans also known as home equity loans is generally low. Hefty amounts can be procured for longer repayment periods that can stretch from ten to twenty five years. Lenders usually prefer to give secured home loans to the borrowers as this reduces the risk factor.

Unsecured Home Loans Homeowners also go for unsecured loans. These loans carry comparatively higher interest rates than their secured counterparts since the borrower does not pledge his home as collateral. Though the loan amount is calculated on the basis of equity of the home but it usually does not exceed 25000.

Benefits of Home Loans The biggest advantage of home loans is that a lot many lenders are interested in you and you get to choose from varied loan deals. The other advantages are cited below:

  • No constraints on the use of loan amount availed
  • Lower interest rates
  • Flexible repayment options
  • Hefty amounts may be availed
  • Long loan tenure
  • Negligible early redemption penalties
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