Homeowner loans are a type of secured loan, one that’s secured specifically against your house. It means that if you don’t keep up with repayments, the lender could repossess your home. That’s a serious repercussion, so it’s not a decision to be made lightly.

Homeowner loans tend to be for sums over £25,000 and repayment periods can range from 1-35 years.  

When it comes to interest, there are a few different loans available.

• Fixed-rate – fixed rates mean the interest rates are fixed from the beginning, and won’t change throughout the entirety of your loan period. They allow you can easily budget repayments and don’t get any nasty surprises if interest rates rise!
• Variable-rate – variable rates mean interest rates are attached to the Bank of England or fluctuate in line with the market.  So, you could reap savings when rates are low, but would also have to pay up when they increase. It’s one for the gamblers as they’re less predictable, meaning it’s harder to budget and plan repayments; whether it’s advantageous or disadvantageous depends on what way rates swing.  
• Short-term - short-term loans are a mix of both. You’ll be on a fixed rate for a set period which tends to be up to five years, after which you’ll be moved to a variable rate set by the lender; therefore, you could see increases or decreases month on month.  Short-term rates could be useful if the next five years are a critical budgeting period. 

What type of homeowner loan you can get depends on range of factors. As with any loan, credit score plays a big role and the stronger yours is the better deals you can access, but it’s a bit more than that.

Property equity is also important – this is how much of your house you actually own.  If your home has increased in value (which most have over the past decade) then that works to your advantage. To find your property equity, simply deduct what you have left on your mortgage from your property’s current value.

Your age will impact what loans you can apply for, too. Applicants for homeowner loans usually have to be between 25 and 65 years old and have resided in the UK for at least the last three years, but each lender will have their own set of eligibility criteria.

It’s also a fairly standard procedure to show the lender you can repay their money by providing proof of income.

It’s easier to take out a homeowner loan with poor credit history than an unsecured one, but that doesn’t make it a dead cert.

Depending on your circumstances you might be able to find a lender, plus there are some loan companies who specifically loan to those with poor credit history. But you should be cautious, as you’ll never get the cheap deals advertised and borrowing will end up costing you more in the long run. Always consider other options first and remember that if you can’t keep up with payments, it’s your home that’s on the line.