Have you ever thought why financial pundits quote buying a house or a piece of property wise investment? Getting the ownership of your own home is undoubtedly a "big deal". The key to your home can literally unlock the doors of a cash trove known as a homeowner loan. Please note when I say a veritable cash fund, I mean ready financial help for future investments or in times of needs. A loan, no matter how attractive it may sound, should never be used to fund a lifestyle beyond your means. That's financial suicide combined with bushels of stupidity that will make you easy prey for the loan sharks.
If you are a UK homeowner, you may opt for a homeowner loan to tide you over your hard times. A homeowner loan allows you to borrow money against the equity of your home. The equity in your home will depend upon the market value of your home. Any renovations or extensions done to your home will contribute to the value of your property. Generally, you can borrow up to 90 percent over the value of your home. Although, there are some lenders who may offer you a loan amount up to 125 percent over the equity of your property.
Your credit history goes a long way in determining the loan amount, as well as the interest rate. Higher your credit rating, the more you would be able to bargain for a lower interest rate. Beware- the lender has the right to take over your house in the event of failure to repay the loan. Work out your finances and decide on a manageable loan amount that you would be able to pay off comfortably. Plan out your monthly expenses accordingly and take care not to miss payments. Failure to pay your instalments will lead to bad credit rating.
Be aware of hidden costs. As a piece of real estate is involved, lenders will charge a fee for the evaluation of your property. Additionally, if you are applying for a loan through a mediator, then he might charge a commission against the loan deal. One of the best ways is to scour the internet for online lenders. Not only would they provide you affordable loan deals, they would also offer certain benefits which may not be feasible for high street lenders.
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She has done masters in Business Administration and is currently assisting Shakespeare finance as a finance specialist. For more information please visit at [http://www.shakespearefinance.co.uk/homeowner-loans.html]
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