Home Loans

What is a home loan?

Home loan is a term often used for mortgages but is more commonly used for further borrowing where you provide security against your debt. The most common security provided is your property hence home loans are only available to homeowners. Home loans are one of the fastest growing forms of lending in the UK and here we explain what they are, what you need to think about before applying for one, and how you go about doing so.

Home loans are mainly for people looking to borrow a larger amount of money, between £15,000 and £100,000, and want to repay the debt over a longer period of time (more than 10 years). Home loans are suitable for people with a bad credit record or if they are looking to release equity in their property.

Another name for home loans is second charge mortgages. This is because most people that take out a home loan already have a mortgage. This type of borrowing is more expensive than mortgages because they are viewed as a greater risk by the lender. These products will not affect your existing mortgage in any way at all.

If you are using your house as security you generally have to have equity in it, although some lenders will now lend you upto 125% of the value of your house as long as you meet other key criteria such as earning a minimum monthly income.

What to consider when applying for a home loan?

Finding the right home loan can be difficult as there are so many options available. It is easy to go to the first place that springs to mind such as your bank. However, they are unlikely to have the best products and they are relying on you not shopping around. The difference in the amount you have to pay between the best and worst products can be very high so it is worth taking a bit of time to find the best home loan for you.

Firstly, make sure you have sufficient equity in you house by getting an up to date valuation as well as a statement from your mortgage company showing how much is outstanding on your mortgage.

Secondly, make sure you budget properly. Write down your ingoings and outgoings and make sure you properly understand how much you can comfortably afford to spend monthly on a home loan.

You can use our loan calculators to work out approximately how much you can borrow based on the monthly payments you can afford. This will enable you to make sure that the size of the home loan you can afford to pay is sufficient for the purposes you need. Do not borrow more than you need, or more than you can comfortably afford to pay back.

See Myloanchoices loan calculator

Then use the Myloanchoices service to find the right home loan for you.

Home loans from Myloanchoices

If you own a property outright or have a mortgage, we can find you a competitive home loan whatever your circumstances. You can borrow up to £100,000 over a 10 year repayment term even if you have a bad credit record.

The application process is easy with quick quotations provided over the phone. It is free and there is no obligation to apply for any of the home loans recommended.

See Myloanchoices best buy secured loans