Can I get a loan if I own a home?
If you`re looking for a loan, owning a home can make a big difference. Why? When you ask a lender about getting a loan, they obviously want to be sure you`re going to pay it back!
If you don`t own a home, they`ll need to check your credit rating to see how you`ve managed your debts in the past, before they decide whether to lend to you, and how much interest to charge if they do.
If you do own a home (and you`re willing to secure the loan against the equity* in it) they can still look at your credit rating, but they`ll also have the peace of mind that comes with knowing you have the assets to repay the loan - if the worst comes to the worst, they know you should be able to sell your property in order to repay the debt. So you should always think very carefully before securing a debt against your home, as you could be putting your home at risk.
Owning a home doesn`t mean you WILL find a loan...
There`s no guarantee you`ll be able to find a homeowner loan / secured loan (two different names given to a loan secured against property). However much equity you may have in your home, loan providers will still want to see that you`ll be able to afford the repayments.
...but it should make it easier
Of course, one way to reduce the size of your monthly repayments is to arrange a longer repayment term. If you do this, you`ll pay back less each month (although you`ll also pay back more in total, as the debt will be accruing interest for longer).
In many cases, as well as charging less interest than unsecured loans (as there`s less risk involved for the lender), secured loans can also give you access to longer repayment terms and larger sums of money - depending on how much equity you have in your home, and on what kind of monthly repayments you can afford.---
* Equity - the portion of the home that doesn`t have any debt secured against it. In other words, the value of the home minus any mortgage / secured loan(s) you may have.
More on secured loans.