Secured Home Loans

Secured home Loans 

A secured loan is the borrowed money that you pledge an asset or something of value as a collateral for the amount borrowed. This guarantees the creditors that they can secure the loan by taking full possession of the collateral to recover the amount borrowed through the collateral just in case the borrower default. Secured home loan or secured real estate loan is the amount you borrow for the purchase of your home, and you pledge your home or any other property as collateral. In most cases, secured home loans attract a lower interest when compared to unsecured loans. The most common types of secured home loans are first mortgages, home equity line of credit, and home equity loans.

First Mortgage

This is the loan you take when you purchase or refinance your home. This type of loan puts the lender in a more secure position since there are no other claims on the property. The amount the lender gives you depends on your income and the value of your home or the collateral you offered. Because they are less complex, first mortgages are the most popular form of secured home loans.

Home Equity Loans 

You qualify for home equity loans basing on your equity. This means that the higher the worth of your home or the more equity in your name the higher amount you qualify to borrow. And, if you can pledge your home as a collateral, then you can qualify for a commercial loan. This type of secured home loan is also popular, but first mortgages are more popular.

Home Equity Line of Credit

Home Equity Line of Credit (HELOC) is a variation of home equity loan, and it works like credit cards. This means you can get money from your lender basing on the balance in your credit line account. You can also withdraw the amount through electronic means or even write cheques. Although you use your home to secure this type of loan, it differs from the above loans because you don�t repay the loan through fixed monthly installments.

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