Derek Hosewood’s Homeowner Loans Weblog

I had a friend, lets call him Mr R, who’s being working through getting a secured loan for months now so i thought i’d explain some of the stage this went through to take some of the fear and mystery out of the whole process.

Now some lenders claim to ‘have the money in your bank account in 24 house’ – now i’m sure this happens when someone has a glowing credit rating, meets all of their criteria exactly and has nice simple easy-to-understand finances. The reality is: This isn’t usually the case.

Mr R filled out a brief form (at Homeowner Loans as it happens) and a friendly member of staff called him back to get some more details.

Since he didn’t have a perfect credit rating he only had a couple of options but there were still options. Then he was given quotes on these lenders (amount per month, total amount payable, duration etc).

One of these seemed suitable so the next step was to get a valuation of his property. This was done to see how much the lenders would be able to lend him. Usually most reputable lenders will lender you up to 70-80% of the value of the house. Now it not as simple as “oh i have a £100,000 house so i can borrow a secured loan amount of £70-80,000″ since it depends how much mortgage you have outstanding.

The friend in question had £40,000 or so left on his house and some unsecured debt he wanted to consolidate. This meant that despite his house being worth £125,000 he could only borrow £30,000 (which was fine in his case). By this time another valuation we required and another cool-off period was required (a 7 day period that the lender must not contact the client).

This whole process took nearly 3 months but my friend was happy with the result and he didn’t feel pushed into anything.

Hopefully that removes some of the mystery for some of you