Whenever you begin the search for how to finance a big change in your life – be it a new car, home improvements or even to consolidate all your existing debts, the chances are you’ll come to a crossroads: do you want a secured homeowner loan or an unsecured personal loan?
Both have their merits but both have drawbacks too so you have to choose carefully. Cost is a big consideration and there are differences between the two types of loan that will make your choice easier.
How secured homeowner loans work – and how much they cost
Secured homeowner loans are the most popular way to borrow lots of money. They are often called ‘home loans’ because invariably you will be putting up your property as security against the money you borrow.
Because you’re offering your home as a guarantee, lenders are willing to lend you more money. They can rest easy because they know they can repossess your property if you fail to keep up payments.
That’s may seem a big risk for you to take, but if you follow the golden rule of “don’t borrow more than you can afford to pay back”, then you should be fine.
With a secured homeowner loan you can generally borrow anything up to