Homeownership has been sufficiently discussed on many online sites and articles. However, we receive thousands of inquiries each month that make palpable that there are many misconceptions about homeowner loans. The consequences of homeownership on credit assessment, income assessment and loan approval are ignored by most of the personal loan applicants regardless of the loan type they are seeking. Therefore, it is important to clear out this subject so customers can benefit from the advantages that being a homeowner implies.

Ownership and Credit Assessment

Being a homeowner will make it far easier for you to get approved for any loan type regardless of your credit score or history. This does not mean that you credit report will not be pulled. Only no-credit-check loans require no verification of your debt payment history. However, even if you have a low score, approval for regular loans is achievable as long as you own your property. Tenants, on the other hand will have more difficulties for getting approved with a low credit score.

Ownership and Income Assessment

The income requirement for approval vary from one loan type to another. Yet, almost all of them require sufficient income to afford a minimum average monthly payment. Based on that figure, the repayment program can be agreed with longer or shorter schedules that will imply lower or higher payments each. Yet, being an owner implies that the income requirements for approval will be less harsh and that your negotiating stance will be stronger when agreeing with the lender how the repayment will be.

Ownership and Loan Type

There is an important misconception about homeowner loans. It is believed by many that these loans are all secured loans which is not true. The requirement for available home equity is not a must because there are also unsecured owner loans which have better terms than unsecured tenant loans due to the less risk involved in the transaction. Therefore, collateral is not a requirement for the approval of this loan type despite what many online sites state.

What makes these loans different then? Basically, the fact that the lenders will take into account the you possess the title deed of one or more properties when settling your loan terms. This will imply better loan conditions for you like a lower monthly payment, lower interests, more flexible repayment schedules, forbearances, grace periods, no prepayment penalty fees, etc.

Why Is There A Lower Risk If Loans Are Not Necessarily Secured?

It is important to note that your assets guarantee your debt even if you do not use them as collateral for the loans and lines of credit you take. Lenders always have legal actions available to them in case you default on your debt. Though it is much easier and faster to recover their investment if there is a security guaranteeing repayment, the entire debtor's assets do act as a guarantee for unsecured debt. Therefore being a homeowner reduces the risk involved in the transaction for the lender because there is a property of significant value which can be sold to repay the debt in case of default even if they have to wait for a long legal process.