The Major Differences In Secured Loans Otherwise Homeowner Loans
Secured loans otherwise known as homeowner loans have been a feature of the UK finance industry for some considerable time now as they go way back to the early 1980s., and homeowners have always regarded these secured loans as a good way to obtain a loan.
Although some aspects of these loans have remained unchanged over this period but like many other products there have been some changes.
The first feature of homeowner loans that have stayed the same is the fact that they require to be secured against an asset which is the equity on a 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.
Nowadays the maximum equity required for obtaining secured loans or homeowner loans is 70% for the self employed and 80% for those in employment.
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 big change is in the number of homeowner loan lenders.
Almost thirty years ago there were only two secured lenders which by the end of 2006 had extended to the teens of lenders, but the recesion put paid to this and the majority went out of business as secured loans fell by over 80%.
Another main difference is the income proof required by self employed applicants which used to have self declarations available but now the self employed are required to produce full accounts.
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