The 4 Essential Facts About Getting the Right House Loan!

Melinda (Milli) Haine Melinda (Milli) Haine | Loan Underwriter

A house loan secured by the equity in your property offers you the opportunity to borrow quite a bit of money over a flexible repayment term. In fact, Secured Loan Expert believes there are not many other types of consumer finance offering as many benefits as a secured house loan. However, as with any kind of financing, there are certain things you need to know before you agree to accept a loan offer.

The main things you need to know are:

  • how home loans are secured
  • the risks involved with these loans
  • how much it costs to borrow
  • how to find the best possible deal.

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How Loans Are Secured

A house loan is secured by offering your home as collateral. When you accept a secured loan offer, you are agreeing to allow the lender to put a charge on your house. Should you default, the lender could repossess the house and sell it in order to recover what you borrowed. In the event the sale does not satisfy both the mortgage and your secured loan, you will still be liable for the balance. The possibility of repossession is the main risk that comes with a secured loan.

In terms of how much you can borrow, it depends on your credit history and the equity in your property. Your total equity will be the maximum amount you will be allowed to borrow regardless of how good your credit is. Your borrowing limit might be lower depending on your credit history and the loan-to-value ratio established by your lender.

Borrowing Costs

The amount of money you repay on a secured loan is more than just a combination of principal and interest. There are other fees and charges involved. Lenders include these additional expenses under what is known as the ‘total cost of borrowing’. For example, the lender may charge you for a home appraisal before giving you any money. Of course, there will also be administrative fees, filing fees, and so on.

Borrowing costs can add significantly to the total amount you repay over the life of a loan. Therefore, it behoves you to ask about all of these costs before you accept an offer. Go for a loan that gives you the lowest interest rate and the fewest additional costs.

Finding the Best Possible Deal

Shopping for a house loan is a lot like shopping for car insurance. You find the best deal by comparing multiple lenders and loan products side-by-side. It is only when you get into the finer details of the loan offer that you will discover how much difference there is between lenders. Having said that, there is one thing you need to be cautious about – applying with multiple lenders simultaneously.

Every time you apply for a loan, the lender runs a credit search. Every credit search appearing on your record has a negative impact on your credit score. This means you are better off applying for loans one at a time. If the first lender you apply with does not come back with an acceptable offer, that's the time to move on to the next one. You can avoid having to apply with multiple lenders by insisting lenders supply all the necessary details before you make an application. A bank unwilling to provide those details is one you probably do not want to borrow from any way.

You can put the power of your property to work to fund your long-term financing needs. Doing so means obtaining a house loan based on the equity you have already built up in your property. Secured Loan Expert recommend you take your time to compare lenders and loan product diligently. When you are sure you have located the best deal, go ahead and apply. You should be able to get the cash you need with reasonable terms and a favourable interest rate.

Alternatively you can take advantage of our free expert advice. All you need to do is call one of our friendly secured loan experts and they will do all the work for you.

With the technology at their fingertips they can trawl the whole of the market to find the most suitable offers that meet your desired criteria in a very short space of time. They can then show you detailed comparisons of the deals available and will recommend the best options. If you are happy with the deals they find they will let you know exactly what the full costs are for any loan will be and will use their expertise to make an application to the lender on your behalf that shows your case in the best possible manner ensuring that you have the highest possible chance of gaining a fast approval and getting the money you need.

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