Homeowner Loans Before And During The Credit Crunch.

Obviously only homeowners can apply for homeowner loans.

Homeowners can apply for either an unsecured or a secured homeowner loan. Before the advent of the credit crunch it was relatively easy for a homeowner to obtain an unsecured loan, because if the borrower defaulted on payments the loan lender could place an inhibition on the property.

An inhibition, as it is a form of security is placed on the Land Registery, and if the homeowner wants to sell up and move house the inhibition has to be payed off and the funds at last go to the loan granter.

As loan funding of any kind is not very available in the current economic climate unsecured loans are almost a thing of the past unless you are someone who hardly requires a loan in the first place. You would have to be settled as regards your job and your years at the same address to have any chance at all of being considered for an unsecured loan.

This means that the best and in fact probably the only way for a homeowner to obtain the loan required nowadays is by the means of a secured homeowner loan. The secured homeowner loan is secured against the equity of a property.

Before the crunch 125% equity loans were available which meant that homeowners with little or in fact no equity in their property could obtain fairly large secured homeowner loans. This was rather fool hardy, and when house prices started to follow the situation became dire for the secured loan lenders concerned.

This has all changed and the maximum LTV for employed applicants is 80% and for self employed applicants the maximum LTV is 70%.

Homeowner loans have really gone from one extreme to the other. Secured loans are now too difficult to obtain whereas before the recession the underwriting criteria was often too lax.

It is to be hoped that the fate of the homeowner loan will change and that a lender will appear who is willing to grant up to 90% LTV homeowner loans.This will kick start this finance sector before it is too late.

Want to find out more about secured loans, then visit liz's site on how to choose the best homeowner loan for your needs.

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