Secured loans which are also known by their other name of homeowner loans, were in the past the loan of choice for many homeowners.
There were a number of reasons why this was the case and one of the reasons were that that they were all purpose loans that could be used for any reason providing that the purpose was of course legal, and this is the same as with a remortgage.
Homeowner loans are also good when used as credit cards are cleared off leaving a cheaper repayment in place.where by all debt in personal unsecured loans and expensive
They were useful loans for the self employed, as the self employed could self declare their own income with what is commonly called a self cert.
Those who owned their home with none or very little equity could obtain a secured loan as there were 125% equity plans offered by a number of secured loan lenders.
These secured loans were obtainable at loan values of up to 60,000.and this is a lot to borrow with little equity to offer as security
This all changed and the number of secured loans applied for and accepted fell by over 80%, as one lender and one broker after the other exited the market.
There were no longer any 125% equity plans available and the same held true of self employed loans as self certs were no longer accepted.
Things stayed thus during the recession, and any brokers and lenders left in business struggled to survive.
Things remained so during the credit crunch, and those secured loan lenders and brokers who stayed in business were short of customers.
Change number one is the relaxing of loan to values, which during the years of the recession were reduced to 70% and 80% for the self employed and employed respectively.
Loan to values has now been raised from 70% for the self employed to 75% with the same 5% increase available also for employed borrowers.
The second bit of good news is the re appearance of self certs at 60% LTV
These new self employed loans along with the increased LTV hold out new hope for secured loans.
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