How to Get the Best Secured Home Loan for Your Needs
As a homeowner, you may be thinking about using the equity in your home to take out a secured home loan. However, you might also be confused as to how to make sure you get the best deal. After all, there are many things to consider along the way. We want to help by explaining how you can get the best loan possible based on your circumstances. It comes down to comparing, researching, and understanding how the process works.
Comparing secured home loans is easy in principle. You can do it in one of two ways: use a comparison website or contact individual lenders in person. The online method is the fastest and most efficient way to compare in the Internet age. As you compare, you will be looking at four primary things:
- Representative APR â?? The representative APR is a combination of your standard annual percentage rate (APR) and all of the upfront costs added to the origination and administration of your loan. This number tells you the real cost of borrowing by including all of the known costs up front.
- Loan Terms â?? Every secured loan comes with a predetermined payment term. For example, you might accept a loan that will be repaid over 10 years. You will pay less interest by agreeing to a shorter term.
- Borrowing Amounts â?? Lenders advertise their secured loans with minimum and maximum borrowing amounts. These limits can be helpful in creating a short list of lenders offering appropriate products.
- LTV Ratio â?? In order to determine how much you can borrow, a lender looks at both the equity in your home and what is known as the loan-to-value ratio. The LTV ratio is expressed as a certain percentage, say 60% for example. This number also helps to weed out lenders unable to meet your borrowing needs.
Comparing secured loans is only one part of getting the best loan for your needs. You also need to do some research in terms of loan servicing and included costs.
The law requires lenders to disclose all of the terms and conditions applied to their loan products. You have the right to receive all the necessary information before making a loan decision. Take advantage of that right. Research to find out how loans are serviced by lenders, what the upfront costs are actually paying for, whether or not there are any prepayment penalties, etc. The more you know about the terms and conditions of a secured loan, the better off you will be.
Researching lenders also offers a second benefit: it gives you a little more leverage when negotiating a secured home loan. Believe it or not, the terms and conditions you see on a website do not necessarily have to be those you eventually end up with. You have some room to negotiate better terms.
Alternatively you can use our professional advice for free. Our team of secured loan experts are able to scout the whole of the market for the best offers available from the lenders, help you compare these offers side by side and finally create and submit a fully optimised application on your behalf to ensure your case is seen by the lenders in the best possible light.
Our team will also inform you of all the costs involved in getting the loan before you make any decision to proceed meaning there wonâ??t be any surprise costs popping up later in the process. Just call our friendly team today to get the help you need.
Preparing for the Future
You may not need a secured loan right now. Nevertheless, there are steps you can take to make sure you get the best loan should you decide to apply for one in the future. For example, your credit history and score play a role in the interest rates lenders will charge for secured loans. You can prepare for future borrowing by doing everything you can to protect your good credit today.
Another step you can take is to make sure you keep your home in top shape. Remember, secured loans are offered based on the equity your home possesses. Maintaining maximum equity depends on also maintaining the condition of your property. The better it is maintained, the more it will be worth on the retail market. In turn, that increases equity.
A secured home loan is a great financial tool for funding long-term financing needs. To get the best deal, make sure you understand how the process works, do your research, and compare lenders and loan products. You will be glad you did when it comes time to accept an offer.
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