| Until
the start of 2007 secured loans, also known as homeowner loans
were the loans of choice for homeowners.
Only homeowners
can apply for homeowner loans and hence the name.
The asset
in question is the security of the secured loan applicant's
property.
Secured
loans started about thirty years ago when the only two lenders
of note were First National Bank and Cedar Holdings.
Over the
years that followed other homeowner loan lenders entered the
market mnany of whom withdrew just as suddenly as they had
arrived.
During
the nineteen ninties, the secured homeowner loan market stabilised
and there was a solid steady number of lenders offering these
ever so popular loans.
Companies
such as FNB EPF, Paragon, Future Mortgages, Nemo, Blemain,
First Plus, etc. all flourished and the demand for their products
was brisk.
They all
had different under writing criteria, but as there were so
many different secured loan plans on offer from all these
lenders, the vast majority of homeowners were eligible for
a homeowner loan.
There
were 125% equity plans,which meant that the borrower could
obtain a loan of over 25% of the value of the property.
It was
possible for the self employed to declare their own net profit
without producing any additional proof.
Some lenders
even accepted unlimited adverse credit in the shape of mortgage
arrears, late loan payments, defaults and CCJS.
In the
course of the last three years many secured loan lenders ceased
trading and the under writing of those left became much more
strict.
The self
employed had now to present two years accounts instead of
self declaring their earnings.
This forced
many who could have made good use of a secured loan, for debt
consolidaion in particular, were denied a loan and were often
forced to seek debt advice from one of the many hard pressed
free debt advice agencies.
Link Loans
were one of the many secured loan lenders who exited the market
during the recession, but only last week they reappeared due
to having obtained funding from RBS.
The are
accepting those who have only been self employed for six months
and the proof of self employment required is a business invoice
accompanied by three months bank statements.
Link Loans
are even prepared to accept some bad credit and the LTV is
70% for self employed and 75% for employed applicants.
This should
mean that many who have wanted to apply for a secured loan
for up to three years now can apply again.
These
loans will now mean that many who have been seeking debt advice
will now be able to obtain the debt consolidtion loan that
the debt advice advisor recommended.
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