Secured Loans / Homeowner Loans— The Difference And The Similarity
Secured loans which are also commonly called homeowner loans are not a new concept as homeowner loans were first introduced in their current form about three decades ago and they have always proved popular with homeowners needing finance.
While much has remained the same with secured loans since the early 1980s some features about them has changed.
One thing and the most important thing that has remained constant is tht they require collateral and the security needed in the case of homeowner loans is the bricks and mortar of the property
This means that the value of the property must be higher than the mortgage on the property, and equity is therefore the difference between the value of the property and the mortgage balance.
Since the credit crunch homeowner loans are available at 80% LTV for employed applicants and a maximum 70% for those who are self employed.
Before the recession secured loans were available at not only 90% or 95% but were granted up to 125% which meant that homeowner loans were available at up to 25% more than the property was worth , and this meant that although these are supposedly secured loans on a 125% plan there was little or no security.
Therefore one major difference in secured loans since their inception until now is the equity difference.
Another major difference between the past and now as regards secured loans is the number of secured lenders .
At the inception there was only two lenders worth considering but by the start of the credit crunch the homeowner loan market was settled with teens of the same secured loan lenders offering this product, but the majority of them have gone out of business.
An additional change is in the difference in income proof needed for self employed borrowers who now require accounts instead of the self certification of earnings as in the past.
Learn more about secured loans. Stop by Champion Finance’s site where you can find out all about homeowner loans for you.
