Owning a house of your own has a dual advantage. It not only provides you
with the satisfaction of having your own house that can be decorated and used
as per your wishes but also proves beneficial when you are in need of large
amount of money. It can be used to pledge as security against the loan.
long term secured fiscal programme designed for those who are in need of cash
and are proud owners of a house. In other words, a home acts as collateral.
Applicant has to decide whether he would like to take a loan on variable or
fixed rate of interest. If, at the time of taking the loan the interest is low,
then it will be suitable o ask for fixed rat of interest. Variable rates are
more often than not lower than fixed rates. But these changes from time to time
depending on prevailing market rates.
The amount of credit given by the lender depends on borrower’s current salary,
credit past, repaying capacity and the estimated value of the house. In general
amount granted is anywhere in the range of 80% to 100% of the estimated value
of asset. However, if the lender is contented and feels that the borrower is
earning well and will be able to repay, he may give the credit of up to 125 %
of assessed value.
Since this scheme involves minimum risk for the lender, it is fair and just to
negotiate the terms in favour of borrower. An applicant, once the loan has been
approved, can save a lot in tax.
This finance programme is long term plan and the borrower can repay the debt
within 15 years. Potential client must understand that in addition to interest
that he will have to pay, various other charges or fees will also have to be
paid by him such as stamp duty, processing fee, early pay off and closing
charges etc. Longer repayment period will ask for more monthly interest. This
will also raise the cost of the loan.
Any adult citizen of UK either having his own business or working for a legally
approved organisation is entitled for this credit scheme.
Aaden Marsh is Advisor of .For any information regarding Home Equity loans, visit