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is almost thirty years since the introduction of secured loans
otherwise called homeowner loans and almost from the beginning
they became very popular loans for homeowners.
As secured
loans must be secured against an asset of property only homeowners
can apply.
For those
unacquainted with the word equity what it in fact is the difference
from the value of a property and the outstanding mortgage
secured on that home.
Secured
loans were first introduced about thirty years ago , and for
a number of years there were only two main contenders who
could even really be considered as substantial players in
this particular loans sector, and these were Cedar Holdings
and First National Bank, commonly referred to as simply FNB,
although thirty years ago they were called First National
Securities.
Over the
years other such companies came and went, but eventually,
about twelve years ago, the secured loans industry seemed
to stabilise and several such firms appeared to be there for
the long term such as EPF, GE, Paragon, Future and several
others.
The industry
was buoyant and these lenders thrived as homeowners were only
too eager to take out a homeowner loan which they could use
for almost any purpose from home improvements to paying for
a holiday, a wedding, to buy a car or any other vehicle, etc.
Debt consolidation
is best arranged by taking out a secured loan where all debts
are rolled into one. all combines into one entity leaving
only one repayment.
Over the
years it appeared that the equity margins for secured loans
became slacker and slacker and this financial product
eventually became available not only at 100% loan to value
but even up to 125% LTV which meant that the homeowner loan
applicant could borrow up to 25% more than the value of his
property.
The year
after year of rising property values contributed to the success
of the companies advancing these loans but when the credit
crunch started and property prices fell many secured loan
lenders fell with them.
Many homeowner
loan lenders went out of business and lenders such as Nemo
and Blackhorse made their criteria so strict that many could
no longer apply for a secured loan.
A couple
of months ago these two previously mentioned homeowner loan
lenders slackened their equity margins from 70% LTV to 80%
for clean staus employed applicants which heralded a slight
improvement in the ailing market.
Kensingto
and Zwift who had left the homeowner loan sector are back
in business and some brokers have been granted an agency with
them.
The most
recent news concerning secured loans is that a new lender
has entered the market and is prepared to advance this product
up to 9% LTV and this is the best piece of news that prospective
borrowers and secured loan brokers have heard for almost three
years now.
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