If you have an attractive house, with interiors of beauty and good looking exteriors, and have been thinking of availing of a loan, it is the appropriate time now, to get a Home Owner Loan. It is a loan granted to you against your house. This loan will bring out the hidden wealth your house possesses, and it will provide solutions which no other loan can. For the lender, there is no risk involved because the loan is against your house, and he will recover his loan by selling the house if you fail to repay the loan. For the borrowers, there are many benefits.
How is the Loan Amount Determined?
The amount you can borrow depends on the equity you have in the house. The biggest advantage is that there is no need for the equity to be put up on stake. You will be able to borrow more, since the home owner loan is secured against your property. The payment too can be stretched over a much longer period, say between five and twenty five years. As for the interest rates, it will depend on factors such as: the amount you borrow, the period of repayment, your financial standing, your credit record, proof of employment and income. All said, interest rate will be lower compared to a personal loan.
Features of the Loan
There will be no question regarding the use of the loan amount. You can use it for any purpose you want. You can consolidate your present debts; you can go in for a new car; you can go out on a holiday with the family; or you can carry out repairs and renovations to your house. And as regards repayment, this loan offers flexible terms, since the home owner loan is mainly based on the value of the equity in the house.
We all think, because we have been taught to believe it that way, that our house where we reside is an asset. As long as we make mortgage payments every month, our house is only a liability! In one way, it is an asset – not ours, but the lenders’. Only when we sell our house for a profit or we get regular income from it, more than the amount we pay like repayments, rates, maintenance, etc. It is an asset; otherwise, it is nothing but a liability!
Why should we think that our house is an asset to the lenders who have given us loan? Regularly, we are making payments on mortgage, major portion of which is towards interest. It is income for lenders.
A simple calculation will reveal that, generally a borrower of home owner loans will pay more than three times of the online personal loans amount, after taxes. So, it does not need intelligence to say that the lenders do make big profits from our house by offering home owner loans. It can, therefore, be said that our house is an asset to the lenders.
3 responses to “Home Owner Loan Brings out the Hidden Treasure”
Asset or not but our house is certainly one of the biggest investments we could ever make in this life. So, we should regard it both as a liability as well as an asset in its own terms. Its true that we take out mortgages against the equity of our home but that doesn’t imply that we can be careless about paying back what we borrowed. This is because defaulting on mortgages would have our house foreclosed which would severely affect our credit rating and show up on our credit report for several years. This would render us ineligible for fresh credit.
Still, the advantages of taking out a home equity line of credit (HELOC) which it is here, provides us with a lot of flexibility in the way we can use it, as already discussed above. However, one should opt for it after conducting a thorough research in the market and obtaining multiple quotes from at least three different lenders. This would help us to land the best deal possible that are available in our area.
That’s very nice say Audric, as you enlighten the whole concept the Loan. Everything relating to decision making becomes easy for people.
Glad you liked it Atul.