Homeowner Loan: Low Broker Fees & Interest Rates
Take out a homeowner loan with ABC Finance and save thousands with our market leading 5.5% broker fee – capped at £2,195.
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A homeowner loan is a type of loan that allows you to borrow money at a low rate and secure funds quickly.
From applying to funds hitting your bank account can be achieved within 3 days, without having to change your mortgages terms.
These loans are ideal to finance debt consolidation or home improvements, although they can be used to purchase a car or raise a deposit to purchase an investment property.
At ABC Finance, we arrange home loans with market leading 5.5% broker fees. Get in touch today and save money on your loan!
What is a homeowner loan?
A homeowner loan is a type of secured property finance that allows you to borrow against the equity in your home or an investment property.
Homeowner loans use your property as security, or collateral for borrowing, and they sit behind your existing mortgage, with the consent of your current mortgage provider.
Homeowner loans are also known as home loans, a secured loan or a second charge mortgage.
They allow you to borrow a lump sum of money against the equity in your home or a buy to let property.
Homeowner loans are popular because they allow you to borrow more than would be possible using an unsecured loan, with many lenders offering up to £250,000.
The amount you can borrow using a home loan will depend on your property value, current mortgage balance, your income and your chosen lender’s affordability criteria.
How do homeowner loans work?
Homeowner loans work like any loan or mortgage, allowing you to borrow a lump sum over a set term in return for regular monthly repayments.
They sit alongside your existing mortgage and allow you to borrow against the equity in your home over a long loan term, much like a mortgage.
Much like mortgages, many of these loan products are fixed rate, meaning the monthly repayment remain the same during the fixed interest rate period. Some loans are variable rate, either tied to the lender’s variable rate or the Bank of England Base Rate.
What can homeowner loans be used for?
Homeowner loans can be used for almost any purpose, although the most common uses are home improvements, debt consolidation, or to pay a large bill such as a wedding or business expense.
Due to the longer term, the monthly payments on these loans are much lower than unsecured borrowing, such as a personal loan or credit cards.
This lower monthly cost makes them an ideal loan product for debt consolidation, where a borrower is looking to reduce their monthly repayments.
Home improvement loans can be used by homeowners to fund many types of improvements, including redecoration or refurbishment, a new kitchen or bathroom or an extension.
How much can I borrow using this type of loan?
You can borrow anything from £5,000 to £250,000 with this type of loan. A homeowner loan gives you access to larger amounts than many unsecured products.
The amount of money that you can borrow is dependent on your individual circumstances, including property value, mortgage balance, affordability, the loan term and how much money you need based on your needs.
As with all loans or mortgages, an individuals current finances, outgoings and existing instalments will be considered to ensure the lending decision is correct and the ability to keep up the monthly loan payments is secure, even should there be a change of circumstances.
To find out your maximum loan amount, how it compares to a mortgage and how you can pay lower interest on your loan, get in touch now. Save money on your homeowner loan with ABC Finance.
How quickly will I receive my loan?
A homeowner loan can be completed quickly. We can complete a homeowner loan application and have the funds in your bank account in as little as 5 days, although most take around 2-3 weeks.
The time it takes for the money to hit your bank account will depend on whether a valuation of your property is required and how quickly you supply the required documents.
The homeowner loan application process is simple, and our expert team can guide you to a quick completion.
Try our – Homeowner loan calculator.
How much does a home loan cost?
The costs to consider are the cost of interest, any additional loan fees and the monthly cost of borrowing.
Loan interest rate guide
The lowest rate in the market is currently 5.69% for a 5 year fixed product.
The interest rate that you’ll pay will depend on your credit history, the lender chosen, and your loan to value ratio.
The rates charged on second charge mortgage lending are slightly higher than first charge mortgage rates, but the difference is often not significant, especially on lower LTV loans.
Understanding fees and other costs
In addition to the interest charged on these loans, you may be faced with other costs. It’s important that you consider fees when you compare loans. The most common ones are:
- Lender arrangement fee – Also known as a product fee. This is charged by the loan provider as part of their loan pricing. In most cases, this fee can be added to the loan.
- Broker fee – Almost all brokers charge a fee for their service. Most charge very high fees, often thousands of pounds, while we charge a fixed, low broker fee. In most cases, this fee can be added to the loan.
- Early repayment charge – Should you repay your loan within the first couple of years, you may have to pay an early repayment fee, or exit fee to the lender.
As Financial Conduct Authority (FCA) regulated loan brokers, our job is to keep your loan costs as low as possible, so we’ll always work to find you the best possible deal.
When looking to secure a loan against your property, lenders may charge valuation or legal fees, but this will be explained to you along with interest rate charges and other costs before you commit to taking any loan.
What is the homeowner loan application process?
The homeowner loan process is:
- Talk to a loans expert for instant approval and an initial idea on costs. Full product information and a written quote follows within 1 hour.
- Once you agree to progress and provide the required information, we can submit your homeowner loan on the same day. Additional information may be required depending on whether you require a debt consolidation loan, a home improvement loan, or a loan for other purposes.
- The underwriter assesses the case and, if all is acceptable, a formal loan offer is issued.
- You sign and return the homeowner loan offer, and funds can be released to your bank account.
What documents will I have to provide when I apply?
To apply for secured lending, the following will be required on application:
- An application form – The loan application form usually takes around 45 minutes to complete for most clients, although we can usually complete this with you over the phone in around 15 minutes.
- Proof of ID and address – This is usually covered with either a passport or driving licence and a recent utility bill and is a requirement for every loan.
- Proof of income – Most lenders require 3 months’ payslips or last 2 years tax return for self-employed borrowers.
- Bank statements – Most lenders require 3 months bank statements to verify your income and assess your bank account conduct.
- Your most recent mortgage statement – The most recent statement from your mortgage provider is used to verify your home equity, mortgage balance and monthly mortgage cost.
If you’re planning to use the loan funds for home improvements, a brief breakdown of them would also be helpful. As mentioned above, preparing these documents upfront when you apply will greatly speed up the process.
For debt consolidation loans, make sure you have a full list of your current debts including lender details, outstanding balance, account number, interest rate and monthly cost.
This is required whether you plan to refinance the debts onto the loan or use the cash for other purposes.
In almost all cases, your loan provider will require these documents at some point, so it will save time if you’re prepared when they request them.
Why choose ABC Finance for my homeowner loan?
At ABC Finance, we put our customers first – which is why our homeowner loan broker fees are on average £2,880 cheaper than some of our competitors. On a £35,000 loan, we charge a market leading 5.5%, while many others charge 12.5% of the loan amount – £4,375.
On top of the great value we offer, we’re fully Financial Conduct Authority (FCA) regulated and have been trading since the year 2000. We’re rated an average of 4.8 out of 5 across TrustPilot, Reviews.co.uk and Google reviews and have won multiple awards.
We work with homeowner loan lenders across the market, so we will compare products and secure the best deal for your circumstances.
If you’re looking for low fees, market leading homeowner loan interest rates and great service from an experienced team, get in touch today.
What are the alternatives to these loans?
The principal alternative funding options are:
- Remortgaging – Remortgaging to a new mortgage deal or mortgage rate has the advantage of keeping all of your homes borrowing services with one loan company.
- Unsecured loan or personal loan – These loan options have short repayment terms and allow you to borrow lower sums quickly. They’re a simple way to borrow quickly, requiring little more than a credit check.
- Bridging loan – A bridging loan is a higher risk option that uses your home’s equity to take out short-term finance.
Frequently asked questions
Here are some of the common FAQs that we receive.
Will I qualify if I have bad credit?
Yes, we can offer loans to borrowers with bad credit or a low credit score.
We have lenders that consider borrowers with defaults, CCJs, arrears, IVAs or even bankruptcy.
Of course, those with a perfect credit score will have a higher chance of approval and access to lower homeowner loan interest rates.
As a leading homeowner loan broker, we can compare offers from across the market and offer a specialist range of bad credit homeowner loans for those with a poor credit history.
Get in touch today for instant approval, a written quote in 1 hour and a same day application.
What loan term can I take?
We can offer this type of loan from 5 years to 30 years.
Your maximum lending term will depend on affordability and your current age.
How does a secured loan compare to a personal loan?
A homeowner loan compares to a personal loan as follows:
- Lower monthly payments – As you can borrow over a longer period, the monthly payment is lower.
- Borrow more money – As your home equity is used as collateral for the loan, you can borrow a larger amount.
- More detailed application – As the lending is secured, the application process is more detailed and takes around 5 days in the UK.
Can I take out this type of loan with a mortgage?
Yes, a homeowner secured loan is designed for a customer to borrow money alongside their existing mortgage, leaving their current mortgage untouched.
Instead, your new borrowing is a separate loan with a separate monthly payment.
