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Home
Loans are often thought of as Homeowner Loans or Home Improvement
Loans. A homeowner loan in a loan taken out by a home owner.
A Home Improvement
Loan is a loan taken out to improve your Home.
The
term home loan is normally used in the USA to describe a
loan where propery is used as security for the loan. The
lender will put a charge on the property in order to be
able to repossess the property if the conditions (including
repayment terms) of the loan are not met.
To
work out if you are eligible to apply for a home loan you
will need to ask yourself the following questions.
- Are
you a homeowner
- Do
you have equity in your house
Only
homeowners are able to apply for a loan secured on their
home. The word home is quite different from the word house.
You may well have a house you call home, but if you do not
own the property it is not your house. If you do
own the property you are a homeowner. You don't have to
live in the house to take a loan out secured on it. If you
have a second home which you own then you may also be able
to apply for a loan secured on this.
Equity
is the value of the house left when you have done this calculation:
Take
the amount of all loans and mortgages (and anything else
secured on the house) away from the market value of the
house. Lending companies will need to send a valuer around
to value the house for them so your initial calculation
would normally be obtained from a general feel of the market.
The amount left is called the equity in the property.
You
may not be able to obtain a loan for the whole amount of
equity in your home, this will depend on the lenders terms
and other factors.
This
sort of loan is known as a secured
loan in the UK.
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