What Sort of Homeowner Loan Am I Eligible For?

Unsure which sorts of mortgages, property loans or secured lending products you may be eligible for? Uncover all you need to know about the various homeowner loans on the market and all the pros and cons.

About your mortgage

Error: Yearly income income must be between £1 and £10,000,000.

Error: Regular bonus must be between £1 and £10,000,000.

Based on your yearly income, you may be able to borrow:

£0

Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

£0

Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

£0

Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

What Sort of Homeowner Loan Am I Eligible For?

There are thousands of mortgages and home loans on the UK market to choose from. If one lender has turned you down, it can be disheartening - but you may simply have applied for the wrong product or to the wrong lender.

Here the Revolution Brokers team explains what homeowner loans are and how they differ from mortgages.

If you have any further questions or would like help from an independent, whole-of-market broker to find your home loan, give the team a call on 0330 304 3040, or email us at info@revolutionbrokers.co.uk.

How are Homeowner Loans Different From Mortgages?

Homeowner loans are often called secured loans. They are separate from a mortgage and are secured against your property in the same way.

However, there are different rules and eligibility requirements. Many homeowners choose this type of secured loan to release equity and cover expenses or raise capital. The existing mortgage remains payable as usual and is a separate debt not impacted by the homeowner loan.

The amount you can borrow depends on how much equity you have in your home - the difference between what the property is currently worth and what you owe on your existing mortgage.

Most homeowner loans run from anything between one and 35 years and will incur interest as with a mortgage. The shorter the loan term, the less interest you will pay overall.

How Quickly Can I Get a Homeowner Loan, and How Much Can I Borrow?

This loan type is usually faster to arrange than a mortgage and can raise funds quickly if you need to cover costs such as a financial problem or carry out urgent repair works.

If you do not require a valuation, and the Loan to Value ratio on the application is low, you can release funds as quickly as within one day. Typically, you would expect a homeowner loan application to take around three to six weeks to process from start to finish.

The amount you can borrow depends on:

  • What the property is worth.
  • How much you earn.
  • Your age and credit rating.
  • Why you want to borrow the funds.

Lenders all have different lending criteria and will usually have an LTV cap. For example, if you want to borrow £50,000 against a property worth £200,000, your LTV is 25% which is a low ratio and usually acceptable.

Are Homeowner Loans Available to Bad Credit Applicants?

Possibly, yes, depending on what sort of credit issues you have on your file, when they occurred, if you have since repaid your debt, and how long ago the problems occurred.

Specialist bad credit lenders can offer to lend in most scenarios. However, it is vital to work with a broker to ensure you apply to the right homeowner loan provider to avoid racking up additional hard credit searches and making the problem worse.

How Much Do I Have to Earn to Get a Homeowner Loan?

The application assessment process involves looking at your income to determine whether you can afford to keep up with the repayments.

Lower-income applicants can find it harder to get a homeowner loan or be charged a higher interest rate given that the lender's risk is higher.

Lenders also have varying policies about how they calculate your income. For example, some will include everything, from bonuses and overtime to benefits and allowances. Others will include a proportion of those income streams, and others will calculate affordability solely based on your primary salary.

If you are self-employed, you can also apply for a homeowner loan.

Lenders will ask for your trading accounts or tax returns and calculate your affordability based on your average annual earnings.

Can I Get a Homeowner Loan if I Am Retired?

Potentially, although some lenders have age caps, usually either 75 or 85. Others have no age limits, so you can apply at any age - as long as your income will cover the repayments.

There are several later life mortgage products, so it's well worth speaking to the Revolution Brokers team to determine which options are the most competitive.

Are Homeowner Loans Available to First-Time Buyers?

If you've just bought your first home and want to take out a homeowner loan, that might be to pay for furnishings or redecoration works.

It can be challenging to find approval since your equity will usually be low, and therefore the loan is high risk. After six months or so, you typically have a better chance of approval.

What Happens If I Want to Take Out a Homeowner Loan Against a Non-Standard Building?

Non-standard buildings are always more complex to secure lending against because they can be more expensive to maintain and more complicated to sell were the lender to end up in a repossession scenario.

Examples of properties in this category include:

  • Listed buildings.
  • High-rise apartments and flats with balcony access.
  • Frames of steel or timber.
  • Thatched or tin roofs.
  • Concrete properties.
  • Ex-council residences.

You will usually need a specialist lender to take out a homeowner loan on a non-standard property, with a broker able to advise on your best options.

Do I Need to Have a Mortgage to Take Out a Homeowner Loan?

If you own your property outright and have no mortgage, this is called an unencumbered property.

It can be more difficult to get a homeowner loan if you don't have a mortgage, simply because this type of loan is usually a second charge and secured as a second priority after your primary mortgage.

However, you can find homeowner loans without a mortgage, although again, specialist advice from an independent broker is crucial to assess whether a remortgage would be of a lower cost.

What Can I Use a Homeowner Loan For?

Some lenders will have policies about what you can use a homeowner loan for, but some of the most common purposes include:

  • Consolidating debts, sometimes cheaper than remortgaging, especially if you have a great deal on your current mortgage. Most lenders place a cap on the Loan to Value ratio available on homeowner loans to repay debts, usually up to 85% or 90%.
  • Renovation or home improvements. Homeowner loans are often used to build an extension or convert the loft, for example.

Are Homeowner Loans Available on Buy to Let Properties?

Possibly, but the LTV caps are usually stricter on a buy to let property. Lenders will also need to run affordability checks to ensure the rental income will cover both your buy to let mortgage and the homeowner loan repayments.

Can My Property be Repossessed If I Can't Repay a Homeowner Loan?

Yes, it can be. The mortgage is the first charge, and the homeowner loan the second. That means if you can't pay your debts, the property will be repossessed and sold.

The mortgage lender has first rights on the funds raised to clear their outstanding amount, with the balance used to repay the homeowner loan.

What are the Other Options Instead of a Homeowner Loan?

There are multiple options, so it remains crucial to seek independent advice from an experienced broker before making any decisions.

You should also weigh up the pros and cons of homeowner loans and remortgaging before choosing the right borrowing option.

Homeowner loans:

  • Are faster to arrange and often have no early repayment charges.
  • The rates are often variable and might go up and usually have a cap on the maximum Loan to Value ratio.

Remortgages:

  • Can be more competitive with lower rates.
  • However, there can be legal charges to account for, and interest rates may not be as reasonable as your current mortgage account.

Zero % Credit Cards:

  • Can be used to pay for home improvement costs.
  • Specialist cards charge zero interest for up to two years.
  • If you can repay the borrowed funds within two years, you won't incur any interest.

Which UK Lenders Offer a Homeowner Loan Product?

Many mortgage lenders offer this type of loan, although they will all have different rules and policies about whom they will lend to:

Bank

Homeowner loan policies

Amigo Loans

Available to any applicants who pass their affordability and credit assessments.

Barclays

Offered to applicants with an existing Barclays account, mortgage or credit card. You cannot use it to repay a CCJ.

Capital One

Have stopped offering this type of loan.

Halifax

Available to any applicants who pass their affordability and credit assessments.

HSBC

Available to new and existing HSBC customers only.

Nationwide

Closed to any non-Nationwide members (including HSBC customers).

NatWest

Open to UK residents with a NatWest current account, credit card or mortgage, held for at least three or six months.

Ocean Finance

Available to any applicants who pass their affordability and credit assessments.

Santander

Only offered to existing Santander customers for values over £20,000.

Expert Advice on Homeowner Loans

If you're considering a homeowner loan, it is essential to weigh up the advantages and consider other borrowing products to make sure you're choosing the most affordable option.

Contact Revolution Brokers on 0330 304 3040, or email us at info@revolutionbrokers.co.uk for an independent assessment or to get your application started.

Why Revolution Brokers?
  • Whole of market brokers

  • Mortgage that suits you

  • On time customer support

Latest Blogs

10 Feb 2022
Do I Qualify for First-Time Buyer Status?

Do I Qualify for First-Time Buyer Status? Working out whether or not you are a first time buyer may seem obvious - but there are plenty of scenarios where your position isn't clear! Examples might include: New buyers who have inherited a property they rent out. Buy-to-let investors that have never purchased a residential hom..

26 Jan 2022
How Does a Remortgage Application Work?

Most homeowners know that remortgaging means switching a mortgage from an existing lender over to a new deal. However, the process isn't always obvious. If you're on a fixed-rate deal, you'll want to get ahead of the end of the term to avoid being shuffled onto a higher standard variable rate where your interest costs will undoubtedly ..

17 Dec 2021
Understanding Lender Risk on First-Time Buyer Mortgages

Finding a great mortgage as a first time buyer can feel like an uphill struggle, with a larger proportion of applicants being turned down than a year ago. Around 20% of first-time mortgage applicants are rejected, usually because of the lender risk associated with their loan. Today, Revolution Brokers explains the highest risk facto..

28 Oct 2021
Pros and Cons of First Time Buyer Buy to Let Mortgages

Investing in a rental property can be an excellent way to get onto the property ladder and earn an income. However, if you haven't owned a residence before, you might find that a mainstream bank will automatically turn you down for a buy to let mortgage. In today's guide, the Revolution Brokers team explains how you can become a ren..

12 Oct 2021
Mortgage Deposit Requirements for First-Time Buyers

Buying a home for the first time is a massive step - but the deposit is often a stumbling block for first-time buyers. It can take years to save a sufficient amount or be impossible, so there are several ways to approach the problem and get your foot onto the property ladder. From April 2021, the UK government launched the new mortg..

24 Jun 2021
Why Property Auction Finance is Booming!

There is little doubt that UK buyer confidence is at an all-time high. We've recapped previously in our blogs how property market growth and prices have soared over the last few months! As we head into summer, one key area of mortgage finance seems to be expanding rapidly: property auction finance. In this article, the Revolution..

Offer!

Refer, Relax and get £50

If you refer a friend for a mortgage or any
type of finance you’ll both receive £25
each when their new application
successfully completes.

Know More!

We are proud
members of the:

FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

Ask the Mortgage Experts

Revolution Brokers understands that mortgages can be complex and confusing!

Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.