Homeowner Loans Northern Ireland
How To Get A Homeowner Loan In Northern Ireland
Get the best deal on your homeowner loan in Northern Ireland with ABC Finance and save thousands in broker fees!
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Author: Gary Hemming CeMAP CeFA CeRGI CSP
20+ years experience in homeowner loans
A homeowner loan allows you to borrow money using the equity in your home or an investment property.
At ABC Finance, we offer a whole of market homeowner loan broker service with a low, fixed £1,495 broker fee, saving borrowers in Northern Ireland thousands of pounds.
What is a homeowner loan?
A homeowner loan is a type of loan that allows you to release equity from your home or an investment property (these loans are known as buy to let homeowner loans).
Almost any property can be used as security to take out this type of loan, as long as it has the required equity to meet the lender’s requirements.
These loans are known by several names in Northern Ireland, including secured loans, home equity loans and second charge mortgages.
Common uses include raising funds as homeowner loans for debt consolidation (often refinancing unsecured debts) or homeowner loans for home improvement.
How do homeowner loans in Northern Ireland work?
Homeowner loans work by releasing equity from a property in exchange for a lump sum loan.
The funds are released to you and then repaid through regular monthly repayments, much like how a mortgage is paid.
These loans typically have terms ranging from 10 to 25 years, making them a longer term loan type.
The amount you can borrow is decided based on your property value, the proposed LTV (loan to value) ratio, your credit history (or credit score) and the lender’s affordability guidelines.
Read more – Homeowner loans in England or Homeowner loans in Scotland.
Can a homeowner loan be used as a replacement for a remortgage in Northern Ireland?
Yes, a homeowner loan can be used as a replacement for a remortgage or further advance from your existing mortgage lender.
Should your current mortgage lender refuse to offer further borrowing, or offer on unfavourable terms, a homeowner secured loan is the perfect alternative.
Why are homeowner loans in Northern Ireland Popular?
Homeowner loans’ popularity has increased in recent years due to their flexible lending criteria and simple application process.
The ease of taking out a homeowner loan makes them popular with property owners who want to avoid being bogged down in a lengthy application process.
In addition, as they allow you to borrow over a long loan term, they’re an excellent option for borrowers who are looking for low monthly repayments.
Lenders allow you to borrow anything from £10,000 to £500,000 (or even more in some cases). For this reason, they’re very popular with borrowers who are looking to borrow more money than would be possible using an unsecured personal loan.
What can a homeowner loan be used for?
In Northern Ireland, homeowner loans are used to release equity from a property. Common uses include:
- To fund school fees
- Home improvements
- Debt consolidation
- Business investment
- Funding large purchases
- To fund property investment
How can I get a homeowner loan in Northern Ireland?
The easiest way to get a homeowner loan in Northern Ireland is to use a reputable homeowner loan broker.
A good broker will compare offers from across the market to find the best deal based on your individual circumstances.
A big consideration when it comes to choosing which broker to work with is the cost of broker fees. Many brokers charge up to 12.5% of the loan amount – £5,000 on a £40,000 loan!
At ABC Finance, we offer exceptional service with a market leading, fixed £1,495 broker fee to help save our clients money.
Homeowner loans for homeowners in Northern Ireland
An example of how a homeowner loan could be used by a homeowner:
- You are looking to borrow £40,000 by releasing equity from your home to fund home improvements.
- Your current mortgage balance is £150,000 and your property value is £300,000.
- You raise funds and undertake the full refurbishment of your home.
- This raises your property value to £400,000, giving you a £60,000 profit and an improved standard of living.
In Northern Ireland, the maximum loan amount is up to 95% loan-to-value, so 95% of what the property is worth, minus your existing mortgage balance.
How quickly can you get a loan?
It takes between 3-14 days to take out a homeowner secured loan. For this reason, they’re a popular alternative to a mortgage – which often take over 8 weeks to complete.
When looking to release equity from your property quickly, a homeowner secured loan is often the fastest option available.
How much can I borrow with a homeowner loan in Northern Ireland?
You can borrow anything from £10,000 to £500,000 using a homeowner loan.
The amount you can borrow will depend on your income, property value, LTV and credit history.
The limiting factor is usually affordability rules or LTV.
Our team of experienced secured loan brokers can calculate your maximum loan and offer a quote within 1 hour.
Alternatively, to understand your likely monthly repayments, try our homeowner loan calculator.
Homeowner loan requirements
To get a homeowner loan in Northern Ireland you must meet the following criteria:
- Be a homeowner
- Not exceed a maximum of 95% LTV (based on your new loan and existing mortgage)
- Meet the lender’s affordability criteria
- Supply the required documents needed to get a loan
Read more – homeowner loans in Wales or homeowner loans vs HELOCs.
How much does a homeowner loan in Northern Ireland cost?
The cost of a homeowner loan is made up of 2 factors – interest and fees.
Homeowner loan rates start 5.99% and are usually between 5.99% and 9.99%.
Your interest rate is set based on the lender chosen, loan to value, whether you choose a fixed rate homeowner loan or variable. Your credit history may also impact the interest rate that you pay in some cases.
In addition to the interest charged, there are some fees to consider when taking out this type of loan, although most can be added to the loan.
The main fees are:
- Lender arrangement fee – This fee, also known as a product fee is charged as part of the setup of the loan. In some cases, there is a trade-off between paying a higher arrangement fee to secure a lower rate, or minimising fees at the expense of a higher rate. This fee can usually be added to the loan.
- Valuation fee – Valuation fees are payable where a valuation is required. The fee generally covers a basic survey of the property. In many cases, we can proceed using only a desktop or automated valuations (AVM), there is usually no charge for this and it has the advantage of being instant.
- Broker fee – Broker fees are a hot topic in the homeowner secured loan market. Many brokers charge high fees, often 12.5% of the loan amount. While this can be added to the loan, paying a high fee will increase your monthly repayments and result in significantly more interest being paid over time (interest is charged on any fees that are added to the loan). At ABC Finance, we charge a fixed £1,495 broker fee, saving our clients an average of £2,880 (based on a £35,000 loan)
How is a homeowner secured loan repaid in Northern Ireland repaid?
In Northern Ireland, they are repaid through monthly repayments.
Almost all homeowner loans are arranged on a capital repayment basis, meaning the loan is repaid through monthly payments, which are made up of both capital and interest.
Should you choose to repay your loan early, this is possible. Many borrowers choose to refinance their homeowner loan and combine it with their mortgage when they remortgage their property.
Read more – Can I remortgage if I have a homeowner loan? or How many homeowner loans can I have?
FAQs
Can I get a fixed rate homeowner loan in Northern Ireland?
Yes, fixed rate homeowner loans are a popular option for borrowers in Northern Ireland who are looking for certainty that their monthly repayments won’t increase during their promotional rate period.
It’s important to note that many fixed rate products come with early repayment charges (ERCs) during the fixed rate period (although we can offer products without ERCs or penalties for early repayment).
Can I get a homeowner loan if I have bad credit?
Yes, we offer a specialist range of bad credit homeowner loans for borrowers with a less than perfect credit score.
Bad credit such as CCJs, defaults, missed payments, previous bankruptcies or previous mortgage arrears aren’t necessarily a problem when applying for a homeowner loan against your property.
Are homeowner loans FCA regulated in Northern Ireland?
Yes, homeowner loans are regulated by the Financial Conduct Authority (FCA) in Northern Ireland (and the whole of the UK).
The FCA only regulates loans secured against a property that you have ever, currently live in, or plan to reside in as your primary residence in the future.
The exception is loans secured against your home, which are to be used solely for business purposes. These loans are unregulated, although as an FCA regulated homeowner loan broker, we will still offer you the same high level of customer service, even on unregulated loans.
