Homeowner Loan Process

When looking to apply for a homeowner loan, it’s important that you understand the application process and how to navigate it successfully.

We make the process of applying for homeowner loans simple and save our customers thousands thanks to our whole of market service and low broker fees.

If you’re looking to apply, get in touch today and get the best deal with ABC Finance.

What is the homeowner loan application process?

1. Calculate the equity in your home

To calculate the equity in your home, you simply take the property value and then minus any borrowing that is outstanding against it.

For example, a property that is valued at £300,000 and has a £200,000 mortgage outstanding has £100,000 equity.

It’s important that you’re as accurate as possible when calculating this. That can be achieved by doing the following:

• Contact your current lenders to find your exact outstanding balance – doing this will ensure that you know exactly how much is outstanding.
• Get your property valued – talk to a local agent and request a valuation. In most cases, they’ll value your property for free.
• Check your loan to value (LTV) – loan to value is the percentage of borrowing against the property value. LTV is calculated by dividing the outstanding balance against the property value and then multiplying it by 100.

2. Check your credit record

Check your credit record to make sure everything is as expected.

Even if you have adverse credit, you may still qualify for a bad credit homeowner loan, so don’t worry if things aren’t perfect.

The best way to check your credit record is by using a comprehensive service like CheckMyFile or Clearscore.

3. Work out how much you’d like to borrow

Understanding how much you need is an important step. Break down exactly what the funds will be used for and how much is needed. This will ensure you borrow the exact amount needed, no more and no less.

Borrowing too much will result in additional interest being paid needlessly.

To help with this, try our homeowner loan calculator, which will allow you to work out your potential monthly payments.

4. Consider what you would like from a product

Do you want the certainty of fixed monthly repayments or the lowest rate possible? Is the option to overpay free from penalties important to you? How much would you like to repay each month – this will impact your ideal loan term.

All of these things will impact which product best meets your needs.

5. Compare brokers

The next step is to consider which homeowner loan broker you would like to work with. The key differences between brokers mainly centre around service levels and broker fees.

Using a reputable broker with solid reviews is always a wise move.

Broker fees can vary massively between each broker. Some charge fees of up to 12.5% – £6,250 on a £50,000 loan, whereas we charge a low 5.5% broker fee.

6. Compare homeowner loan products

Once you’ve selected a broker, or a couple of brokers, you can compare suitable products to find the right one for you. It’s rarely as simple as choosing the lowest homeowner loan interest rate.

Each lender will have their own fees and interest structure and you should compare the total cost of the loan, rather than just the interest rate.

We always work with you to make this simple, comparing products on your behalf.

7. Select a product and apply

Once you’ve chosen a product, you’re ready to apply for a homeowner loan. At this stage, you must complete the application form and supply the supporting documents that the lender requests.

For more on this, read our guide on how to get a secured loan and the documents required.

How long does a homeowner loan take to process?

The homeowner loan process usually takes 1-3 weeks. Should your application be successful, you can expect to receive your funds.

It is possible to complete faster than this, depending on how quickly you provide information requested and the lender chosen.

The time taken to process your application depends on how quickly you respond to lender requests. You can speed up your application significantly by responding promptly to any requests.

Of course, we always do whatever we can to ensure that your application completes exactly when you would like it to.

How can I speed up the application process?

The best ways to speed up the application process are:

• Provide all information quickly when requested.
• Aim to use a lender who does not require a physical valuation of your property.
• Ask your broker to help you with paperwork if you think it will take you time to get back.

Make sure you provide accurate and up to date information to avoid underwriting delays.

Disclosure

Rates from 4.9% APR variable. To enable us to help customers with varying requirements we also have plans available up to 29% APR.

*Representative Example: Assuming you borrow £20,000 over 10 years at an Annual Interest Rate of 6.65% (variable) you would make 120 payments of £248.04 per month. The total amount repayable including a lender fee of £598 and a typical packager fee of £1,100 (5.5% of the loan amount – added to the loan) would be £29,764.80. For comparison the overall cost would be 7.2% APRC representative.

Secured Loans have a minimum term of 36 months to a maximum term of 360 months. If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.