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Homeowner Loans Directory
On application for lines of finance such as loans, the lowest rates
available will often depend on your circumstances, specifically your
credit history and your homeowner status. If you are a homeowner this
means potential lenders have an asset which they will allow you to
secure your loan against. The concept of security comes from lenders
wanting something to fall back on if you do not pay off their loans.
For homeowner loans you will sign a contract meaning that your house
can be seized by the lenders if you do not pay the loan back. The property
will then be sold off to reclaim the monies owed.
Homeowner loans are all to do with risk. As explained above, if
the lender has a better chance of whomever borrows the loan paying
it off, then the risk to them is low. Therefore the interest rate
is lowered. The company effectively takes less money when it seems
like loans will be paid back without problems. Interest rates become
higher when people have a bad credit history. This is when they have
failed to pay back loans, mortgages and other forms of credit. It
is stored on a file which lenders review on application for their
services. If the track record of borrowing is not so good, the risk
is higher, so the interest rate is greater. Whilst applicants with
bad credit can find application for loans difficult, especially if
they are not a homeowner. Being a homeowner allows they lender to
offset the risk of bad credit history against an asset.