PROPERTY NEWS & ADVICE
Homeowners Look to Home Improvements as Market Slows
Getting a loan from a bank is often tricky,
especially if you are in need of a large sum of money or have
a bad credit history. Taking out a secured loan is often an
easier and safer way to obtain such a sum, with the loan being
secured by a high value asset such as a property.
Consistent interest rate rises since August
2006 have made it a testing time for many homeowners, and
for others who have unsecured debts, as the cost of borrowing
has risen. Sharp rises in the US have led to a sub prime mortgage
crisis, with many borrowers defaulting because of their inability
to make repayments.
the problems have not been nearly as prevalent within the
UK during the past year, the 1% rise in interest rates could
mean a £60-70 increase in repayments on a £100,000
mortgage. Larger debts, especially from unsecured loans, have
pushed a growing number of homeowners to refinance their properties
in order to keep up repayments, and to consolidate their debt
into one manageable monthly payment. ASDA Finance has said
that 60% of its customers are using their homeowner loans
in order to consolidate their unsecured debts.
Another worry for homeowners is widely circulating
belief that house prices are set to drop in 2008. Whilst we
are unlikely to see a dip as dramatic as the one seen recently
in America, many consumers are deciding against upselling
and are instead looking towards making home improvements.
These improvements, such as extending your property or redecorating
it, can often be expensive. Taking a secured loan out for
these purposes is often the best way to obtain the necessary
capital relatively quickly.
The maximum amounts available differ from
company to company, but they are often £5,000 - £100,000.
Due to their large size secured loans can also be paid over
very long periods of time, meaning that you will probably
not have to pay huge amounts monthly. Many financial institutions
offer terms of up to twenty five years.
Here is a quick comparison table for some
of the secured loans available in the UK:
Alliance and Leicester
(Rates and term lengths correct
at the time of writing – 04/11/07)
you would like to find out more about Secured loans, see a
larger comparison table available from Motley Fool.
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