subject: Who Fits The Criteria For Secured Loans. [print this page] Whenever someone wants to buy a car, carry out home improvements , etc. unless they are well to do financially, they will need to borrow to buy the product, that means that they will need to apply for a loan of some kind..
Loans divide into two main kinds and these are unsecured loans, which are personal loans, and the secured sort of loan.
When loans are unsecured there is no security needed and everybody can apply, whether it is a person residing with family members, parents, etc. to tenants in rented property and also homeowners.
Tenants can only get unsecured or personal loans, as secured loans are secured against property, and because tenants only rent their home, they do not own a property on which to secure any form of loan.
The fact that secured loans are loans only homeowners is why they are also known by the name of homeowner loans.
The first major feature for secured loans is that the applicant must be a homeowner, and the second feature is to have equity in the property.
The meaning of equity is the balance that remains when you deduct the mortgage on the property from the value of the property.
If a property is valued at 210,0000, and the mortgage is the same, there is no equity, and no secured loan can be offered..
Recently equity was raised to 75% for self employed people and 85% for employed borrowers by one well known secured loan lender. Now it is even simpler to get a low interest loan for almost any purpose including using them as consolidation loans.
These days there are no 100% secured loan plans and the maximum LTV for most secured loan lenders is 75% for the self employed applicant and 85% for those in employment.
If a property is worth 270,000 and there is a mortgage balance of 190,000, the equity would be 80,000.
Secured loans are ideal ways to borrow.
by: Rene Rudy
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