Homeowner Loans Are Seeing Signs Of Improvement.

Over the course of the last three years, the home loans range

, which includes mortgages, remortgages and secured loans have gone through a period of complete turmoil

It was a feature of mortgages and remortgages, during this period, that they had low interest rates.

This was mainly due to the fact that the Base Lending Rate of The Bank Of England was reduced to half of one percent, which was introduced in an attempt to kick start the economy, although this turned out to be a vain hope.

The low rates also did little to encourage people to apply for mortgages or indeed remortgages, and this was caused by the dramatic fall in property values.

Everyone felt so unsure of the future that they had no wish to take on a mortgage to become a homeowner.

Likewise, those who were already homeowners, preferred to remain in their current home rather than move to another property due, not only to the plummeting of property values, but also because of the general uncertanty of the times that they were living in

Now that proprty prices are stabilising and rising, interest rates have already been hiked up by lenders, such as the Abbey.

Applications for a remortgage went down in the same manner as had mortgages.

This is not surprising, as remortgages are simply mortgages that replace the current mortgage with another from a new mortgage provider.

Remortgages were arranged to obtain a lower rate of interest or were utilised for such reasons as debt consolidation.

Secured loans were more adversely affected than the other two home loans, and fell so dramatically that lender after lender and broker after broker exited the market.

Things for the secured loans setor were looking dire for over two years, with the abolition of 100% equity plans and even 125% LTV secured loans which were available previously from a number of lenders, including First Plus and Paragon.

Self declarations of income were done away with for self employed borrowers, who were now compelled to produce accounts when applying for finance.

There have been a number of improvements in secured loans during the past few months.

The first of these was the re introduction by Link Loans of self certs for self employed homeowners who can apply for a homeowner loan providing they have been trading for at least six months, can provide three months bank statements and have a maximum LTV of 60%.

Nemo have increased their LTV for employed borrowers to 85%, and for the self employed, secured loans are available up to 75% LTV.

The most recent sign of renewed confidence was shown today, again by Link Loans, who have increased their maximum loan value from 30,000 to 50,000 which is a signiicant show of confidence.

Secured loans of 100,000 or more can be obtained from other providers.

It does at last look as if secured loans are emerging from a long dark tunnel.

by: Liz Moir

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