Homeowner loans are secured against your property. We are a broker and we arrange secured loans from a panel of lenders. We receive commission upon completion. A fee of 10% of the net loan amount, set at a minimum of £995 and capped at a maximum of £3995 is payable upon completion and can be added to your loan. Loans are subject to status, the rate you are offered may change based on your individual circumstances.
What is a homeowner loan?
Of all the different types of credit you can apply for, a homeowner loan is probably the simplest to understand. After all, it’s exactly what the name suggests. With a homeowner loan, you’re able to borrow a large lump sum of cash as long as you own your home outright or you’ve taken out a mortgage on it.
With a homeowner loan, the amount you borrow is ‘secured’ against the value of your property, which is why you might often hear it called a secured loan instead. You can use almost any type of property as your security, whether it’s a house, bungalow, flat or cottage.
What can I use a homeowner loan for?
You can use secured homeowner loans for almost anything. You can spend the full amount on a major expense or put it towards a handful of different purposes. We’re not here to tell you how to spend your money – we just want to make it easier for you to get the finance you need.
It could be a new kitchen, conservatory or loft conversion that you spend your homeowner loan on. Or perhaps you’d like to use it to simplify your debt payments? No matter what you’d like to use a loan for, we’ll do what we can to make it happen.
It’s not unusual to take out loans on your home if you want to consolidate your debts either. In fact, it’s one of the most popular reasons why our customers do. By paying off all your existing unsecured loans or credit cards, a homeowner loan can reduce your overall monthly outgoings.*
*Remember, even if you monthly payments are lower you could end up paying more in interest over the length of your loan. If you don’t stick to the repayments, your home could be at risk.
What is the difference between homeowner loans and personal loans?
In some ways, homeowner loans and personal loans are similar. There are, however, a couple of key differences. The most obvious, as you’d expect, is that you can’t get a homeowner loan without owning a home. If you’re a renter, you can only apply for a personal loan because you have no property that you can ‘secure’ the loan against.
The other things that set a homeowner loan apart from a personal loan are the amount you can borrow and the amount of time you can borrow it for.
With our homeowner loans, you can borrow from £10,000 up to £100,000 and pay it back between 3 and 25 years. With personal loans, however, you’re unlikely to borrow this amount – and these loans are repaid over a shorter period of time. Unsecured personal loans are a bigger risk to lenders – that’s why the amount you can borrow with them is less than a secured loan.
Are homeowner loans safe?
They are indeed. As with all forms of borrowing, homeowner loans are perfectly safe as long as you hold up your end of the agreement – making your repayments on time, every time. Bear in mind that failing to do so could put your home at risk.
It always pays to do your research before you apply for any loan, not least if using your house as security. If you’re sure you can keep to your monthly payments and only look to borrow the amount you need, there’s no reason you’ll run into any issues with a homeowner loan.
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Who are homeowner loans for?
For homeowners or people with mortgages, homeowner loans might be for you if you wanted to borrow a bigger sum than personal loans or credit cards offer.
It’s also a handy alternative to re-mortgaging if you want to use your home to raise money. For example, you could be in the middle of a long-term mortgage – and that’s something you won’t necessarily want to come out of early, whether it’s because you’re enjoying a low rate of interest or the exit fees are too expensive.
What if you need the money sooner rather than later? It could take a while to find out if you can re-mortgage your home. But our eligibility checker can tell you in 60 seconds if you’re likely to be pre-approved by one of our lenders – without harming your credit score in the process!
Are you making several debt repayments each month? Are you finding it hard to keep them all in check? With a little help, you could bring them all under control and even free up a little more money for yourself. A homeowner loan will let you pay off all those existing debts, so you only need to make one payment each month. Just remember, extending the term could mean you end up paying more interest in the long run.
It’s important to think about whether it makes sense to secure a previously unsecured loan. If you’re struggling to pay off your current loans and credit cards, it could be better to work out an arrangement with your lenders instead of taking out a secured loan.
Homeowner loans for poor credit
Did you know that you could be accepted for a homeowner loan if you have a less-than-ideal credit history? By securing a loan against the value of your home, the risks to the lender are lower – even if you’ve missed payments in the past. The reason? The lender can recover any money by repossessing your home if you fail to pay – that’s what their ‘security’ is.
It’s like having a guarantor who’ll promise to pay anything that you’re unable to. Please rest assured, however, that repossession is the worst-case scenario and a last resort for any lender.
What makes homeowner loans suited to people with bad credit histories is the chance to get your record back on track. Sticking to your repayments is a good way to build up your score. Not only that, but homeowner loans are paid back over a longer period of time – usually at a lower rate than an unsecured loan. This means you get the finance you need at a lower cost.
Who are homeowner loans not for?
Don’t own your home? Then a homeowner loan is off the table, unfortunately.
For homeowners, bear in mind this type of loan isn’t always the answer. If you only need to borrow a smaller amount, for example, a personal loan could be a better option. It’s less risk to you as it’s not tied against your home, and you can pay off your loan quicker.
You might also find it hard to get a good deal – or a deal at all – if you haven’t paid off much of your mortgage yet or if you’re in negative equity.
At Ocean Finance, we find the most common reason people take out a homeowner loan is to consolidate existing debts. The high cost of some major home improvements projects makes homeowner loans popular too. But it’s important not to forget that you can use your loan for almost anything – and our job is to find the best homeowner loans for you with that in mind.
Try our loan calculator to see what your payments could be
The amount we show you is just an estimate. To get a personalised quote, we’ll ask for a few more details.
Estimated monthly payments:£0
Based on your loan request you could be suitable for an
Representative Example If you borrow £25,515 over 10 years at an annual interest rate of 6.5% (variable) you would make 120 payments of £329.03 per month. The total amount of credit will be £28,985. The total amount repayable will be £39,483.60 (this includes an average Lender fee of £495 & Broker fee of £2,975). The overall cost for comparison is 9.9% APRC Representative. Subject to status, the actual rate will depend on your circumstances.
Representative Example: If you borrow £1,800 over 24 months at an annual interest rate of 41.2% (fixed), Representative 49.9% APR, you would pay £111.28 per month. The total amount repayable will be £2670.72
Advantages of a homeowner loan?
You should always think about the options open to you when looborrow money. There are situations where secured homeowner loans make perfect sense – and are much better than a personal loan or takanother credit card:
As a homeowner, you’re more likely to be accepted for a secured loan
You can borrow more – our homeowner loans range from £10 to £100,000*
You can spread the cost over a long time – pay back your loan between 3 and 25 years*
Debt consolidation, as you could borrow the full amount of your existing debts amd make one monthly payment
Your home gives lenders extra security, so you can be approved even with bad credit
* The length and amount of your loan will depend on the amount of equity in your home.
Disadvantages of a homeowner loan?
One of the biggest disadvantages of applying for a homeowner loan is you have to offer your home as security. This means it’s technically at risk until you have repaid your loan in full.
Your lender can repossess your home to recover any money (as a last resort)
Spreading the loan over a longer period means you could pay a lot in interest
If you want to move home, you might have to pay off the loan before you do
If you’re taking out a homeowner loan, you’re borrowing money against the value of the equity in your home. Take away the amount you still have to pay on your mortgage from the value of your home and this is how much equity you have. This helps to decide how much you’ll be able to borrow – and the rate you’ll be offered.
The mortgage provider will also look at things like:
Your credit history
The loan period
The amount a lender can offer you is known as the maximum loan to value (LTV). So for example, if a mortgage offer has a maximum LTV of 90%, this means they’d lend you up to 90% of what your home is worth. So, if your home is worth £100,000 and you wanted to borrow £40,000, the LTV would be 40%
Already paid off a chunk of your mortgage? You’ll need to deduct your outstanding balance to work out your LTV. If your home was worth £100,000 and you’ve paid £20,000 off the mortgage, you’re left with £80,000 in equity. To borrow £40,000, the LTV would then be 50% – got it?
How does equity affect my chances?
How much equity you have in your home will have a say in whether you can apply for a secured loan. If you haven’t paid off much of your mortgage yet, it’s going to be tough to get a good deal. Lenders like to make sure borrowers have as much equity as possible. This is because this is the pot from which they’ll claim back anything they’re owed if you don’t pay back your loan.
How much can I borrow with a loan?
Here at Ocean Finance, we can help find you a homeowner loan from £10,000 up to £100,000 – though the actual amount you can get will depend on your personal situation.
If you decide to move home after taking out a homeowner loan, you have a number of options:
Your lender could let you transfer the loan so that it becomes secured against your new home. You’ll probably find that you’ll have to pay a fee, though.
If you already have enough cash to put down a deposit on your new home, you could use what you make from the sale of your old home to pay off what’s left on your loan.
You could borrow more to pay off the loan, although this could affect your mortgage offer.
How will a homeowner loan affect my mortgage?
Looking to take out a mortgage on a new home? A homeowner loan won’t affect your mortgage application in itself. But it can affect how much you can borrow. Part of anything you make from your house sale pays off your existing mortgage and any outstanding loan amount. The result is that you may have less equity in your home than you thought.
And what if your current mortgage deal has come to an end and you want to re-mortgage your home without moving? One option is to borrow enough so that you can clear the loan. This might be a useful option if you’ve been in your home for a while and built up your equity.
If this isn’t an option that works for you, however, you could keep paying off the loan and apply for another mortgage separately. Bear in mind some mortgage providers may not be so keen to accept your application while a loan is still secured to your home, so it’s worth talking to them first to find out.
How will taking out a homeowner loan affect my credit score?
Getting a quote for a homeowner loan with Ocean Finance won’t affect your credit score. We’ll tell you before you apply whether you’re likely to be successful or not – and that means there’s going to be no unnecessary marks left on your credit file.
Only once you go ahead and apply through our partner lender will anything be recorded on your credit file – and as long as you keep up to speed with your monthly repayments, you’ll start to improve your credit score. Stay on track and you’ll reap the benefits in the long run.
A homeowner loan is often seen as a great option for people with less-than-ideal credit. As the lender has the added reassurance of your home being offered as security, your chances of approval are higher than with other forms of lending.
How do I deal with any issues paying back my loan?
Talk to your lender straight away to see if there’s anything they can do for you. If you think it’s only a short-term problem, your lender may be able to give you extra time to make the payment – and could even hold off making a note of the late/missed payment on your credit file.
Life can take an unexpected twist when we least expect it. If a change in your situation means you’ll struggle to pay back your loan in the long run, your lender could still help. Don’t leave it to chance and hope for the best – especially when your home is at risk. You can also talk to:
At Ocean Finance, our team specialises in getting the best homeowner loans for our customers. We don’t do one-size-fits-all. We’ll treat you as an individual, tailoring a loan to suit your exact needs – even if you don’t have the best credit score. Here’s a taste of what we we’re all about:
More than 25 years of experience
You can take or leave the quote we offer you
Know if you’ll be accepted before you apply
Large panel of trusted UK-based lenders
No matter what your credit score, we’ll try to find you a loan
Loans to suit your personal circumstances
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