Homeowner loans are types of loans for which tenants are not eligible and only people who own their own home can apply.
There are two kinds of homeowner loans in the market place. These are secured homeowner loans and unsecured loans. Until 2007 unsecured loans were obtainable by homeowners. Loan lenders had a bit of confidence when granting unsecured loans to homeowners, because although these loans are so called unsecured the lender can take an inhibition out on the homeowner's property if serious arrears occur.
An inhibition is in reality a form of decree secured against the property, and it is registered at the Land Registry. This means that the loan lender will eventually get his money back as the homeowner will not be able to sell the house until the inhibition is paid off.
Now with the shortage of funding available it is almost impossible even for a homeowner to obtain an unsecured loan, unless he is absolutlety blue chip. That means someone who has lived at the same address for a number of years and is on a good salary in a job that he has been in for several years.
Therefore in the present circumstances if a homeowner wants a loan the secured homeowner loan route is the way to go.These secured homeownr loans require a type of security as guarantee, and when talking about homeowner loans the asset is the property.
Things before the recession and during the recession are very different There used to be 125% equity plans which allowed loans to be granted of 25% more than the property was worth. First Plus was the secured loan lender who introduced this plan.These plans were usually available up to a maximum loan of 60,000.
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 homeownner 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.
What is required is for a new secured homeowner loan lender to enter the market who is prepared to lend homeowners with good credit ratings secured loans of up to 90% LTV or the end of these excellent homeowner loans could be near.
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