Are you looking for another new property? Or maybe for your first property? Or even just for a new car or some other high-cost asset? Did you know that you can get cheaper loans if you opt for a secured home loan to finance your purchase? Well, you can! Here is how it all works.
The first thing you need to do is find the property or asset you want to buy. Then you need to go to a bank and apply for a loan.
It is best to go to a number of banks. There is some competition amongst lenders to get the business of new home owners and such like. If you make it known that you are shopping around for a good interest rate you may find that you can get better rates from the various banks. Obviously, the lowest rate will be the best-secured home loan to opt for.
With a secured home loan, the lender faces very little risk. Why do you ask? This is because you offer your home as collateral against the loan. Basically, you are guaranteeing that you will be able to pay back the loan and that if you find that you are unable to pay it all back, the bank can take your house and sell it to recoup the loss.
The amount you will be able to borrow will depend on the bank's analysis of your financial status and also the value of the home you are offering as collateral. The interest rates you are offered will be dependent on what your credit rating looks like and how much other debt you have. The interest rate on a secured home loan from a credited financial services provider will generally be lower than on an unsecured loan.
You do need to be careful though, that you do not take on more debt than you can handle. You have to be sure that you will be able to repay the loan. If you are unable to repay the loan and end up defaulting you will lose your home to repay the amount owed. Not only will you lose your home, but you will also be blacklisted and no other lender will give you a loan for as long as you have that blacklisting against your name. Basically, it will completely wreck your credit rating.
A secured home loan is a great way to get financing for other asset purchases. You can also use it to consolidate your debt and get a longer repayment term on that debt. You do need to be careful to make sure that you can afford the repayment else you will be in great danger of losing your home or whatever you offered as collateral. You can often get a better interest rate on a secured loan and also a better loan amount than if you were to apply for an unsecured loan.
Looking for a reliable and professional mortgage broker in Campbelltown that can assist you with your home loan? Contact Lendium now!