By Balajee Kannan
We shall discuss here about secured loans for homeowners, the advantages and disadvantages of taking that loans etc.
Secured loans are offered by banks and financial institutions in several countries. These loans can be borrowed by placing a collateral as compensation for the money borrowed. In any case if the borrower is not able to repay the money, then this collateral will be taken over by the bank.
When a borrower places his house as a security or collateral, then it is called as secured homeowner loans.
If a property is in the name of the multiple owners, then also it can be kept for collateral, provided you have to get a no objection signature from all the co-owners even if the owners are husband and wife, relatives etc.
If we keep our home as collateral, we get some advantages like we can ask for more loan amount. As the value of the house will increase in future, we can ask more loan amount. This is a more common type of secured loan.
So most money lenders prefer for home loans and give less rates for secured home loans. The banks in United States of America and united kingdom mostly prefer this loans. The rate of interest varies from ten to twelve percentage of the money borrowed.
The main disadvantage in this loans is the risk involved in case of failed repayments, the financial institution will remind us and give us a chance to repay in consecutive months. If not, they will take the house and sell it in auction and take the amount back.
Article Source: http://EzineArticles.com/?expert=Balajee_KannanBy Balajee Kannan
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