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There are many reasons why a homeowner may decide they need to borrow money against the value of their home. Some possible reasons could include covering the cost of home repair or improvement, taking a holiday or to pay for a child's university education. However, often people may decide to take out a loan to consolidate all of their existing debt. This could have been accrued through store cards, credit cards or other loans. Consolidating it can substantially reduce the monthly payments that are required to clear the balance.

The amount of equity in your home can be a substantial figure and these types of loans are generally at a much lower interest rate than those that are not secured. This is because the financial institution lending you the money knows that should you fail to make the repayments they can foreclose on your home. It is this security that allows them to offer this type of loan to people with a poor credit history, County Court Judgements or who are on a credit blacklist.

It is virtually impossible to turn your television on for more than fifteen minutes before being presented with a company offering homeowner loans. These loans have been available for many years but the level of advertising has grown hugely over the past twelve months. The adverts are presented in a way which make these loans seem simple, easy and without risk but it is vitally important that the borrower realises that their home is at risk if they fail to make any repayments, for whatever reason. These companies will not hesitate to foreclose on your home as that is how they make their profits and how their businesses continue to run.

If you are considering such a loan as this it is imperative to shop around. Check out other providers and compare the interest rates and terms and conditions of the mortgage. Find out how much your monthly repayments would be and don*t rule out your mortgage provider. Re-mortgaging works on the same principle as a home owner loan but many see it as being a much more drastic solution to their problems. However, you already have a history with your mortgage provider so at least you would know that they are genuine and honest.