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Home > Money Blog > Financial Guides > How do Home Owner Loans Work?

How do Home Owner Loans Work?

How do home owner loans work?

Home owner loans are based on the value of your property, and the amount of equity you have available (equity refers to the proportion of your home that you own outright, without a mortgage). When considering a homeowner loan, you need to take into account the loan amount and repayment terms. It’s also important you check the Terms and Conditions, to see if they are suitable for your circumstances.

What is a home owner loan?

By definition, a home owner loan is secured against an owned or mortgaged property, so being a home owner is essential when it comes to taking out a home owner loan.

A home owner loan may allow you to borrow more than perhaps an unsecured personal loan. It can then be paid back over a period of time to suit your circumstances. This makes it a suitable loan option if you plan to spread cost with affordable monthly payments. However, please be aware if you are unable to pay back the loan the lender may have a right to repossess your property.

At Progressive Money we are a direct lender and have a different approach to most other lenders.  We take the time to understand your situation to find the very best borrowing solution for you, without needing to secure the money against your home. We just require you to be a home owner and living in your property.

What can I use as security?

Home owner loans typically use your property as a form of security. It is not restricted to houses only, almost any type of residential property can be used, including bungalows, cottages, flats and apartments.

Are unsecured homeowner loans easy to obtain?

It is easy to apply for an unsecured home owner’s loan with Progressive Money, if you meet the following criteria:

  • A home owner (you either pay a mortgage or own a property outright)
  • Aged between 18 and 70*
  • Either employed or self-employed
  • Live in England, Scotland or Wales
  • Able to afford monthly repayments

As well as your credit rating we take your personal circumstances into account in order to work out a payment plan to suit your income and situation. Our qualified team of advisors are happy to discuss any queries you may have about the application process.

How much can I borrow?

Progressive Money offer unsecured home owner loans ranging from £1,000 to £15,000 with repayment terms from 18 months to 10 years. Whether you are hoping to make some home improvements, consolidate your debts, pay for a wedding or treat yourself to a new vehicle, we may be able to help cover the cost and arrange an affordable repayment plan to suit you.  As a responsible lender, we ensure that all the loans are affordable.

Use our unsecured home owner loan calculator for a no obligation quote to see how much you could potentially borrow.

Typically, a home owner loan would require you to secure against your property’s value. The amount you can borrow will depend your balance of equity, the amount left after the outstanding balance of your mortgage is subtracted from the current value of the property.

Unlike most other lenders, Progressive Money is a direct lender and only ask that you are a homeowner living in your property and can prove your eligibility for one of our loans. We may be able to offer an unsecured home owner loan, so it may not be necessary to secure against your home.

Paying back your homeowner loan

Most home owner loans are paid back in monthly instalments, often through Direct Debit. You are able to repay the loan early, however, please be aware that on settlement you will pay interest up to the date, plus one month extra.

Speak to our qualified advisors on 0161 814 9383 to discuss your loan which may be suitable for you.

Resources

https://www.money.co.uk/loans/what-is-a-homeowner-loan.htm

https://www.oceanfinance.co.uk/blog/how-does-a-homeowner-loan-work-0-5113-0.htm

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