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Mortgage Loans Debt
Platinum Boarder |
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Personal Finance - 2007/05/08 20:01
By having a large asset to secure the loan amount against, you will be able to borrow large amounts for whatever reason you have, the amount is governed by the value of your equity (i.e. the value of your house minus outstanding mortgage), if you have a good credit rating some lenders will offer you up to 125% of the value of your equity, allowing you to raise a large amount of capital.
Of course, being a homeowner does not mean that you have to opt for a secured loan. If you do not wish to have the debt secured against your property, for whatever reason, then you can choose to take out an unsecured form of loan.
Having the choice is a real benefit, as you will be able to weigh up what each option has to offer, and decide on whether you want to go secured or not based on your circumstances.
If you are not a homeowner, you still have a wide variety of options available to you in the unsecured market. As the risk to the lender is higher for this type of loan is accepted to be higher, you have to expect a higher rate of interest, however the competition within this market is keeping the rates to low levels.
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Loans
