Home Equity Loans

Do you have equity in your home?

If you sold your home tomorrow how much money would you have left after paying off your mortgage? If you have a significant amount this is called your home equity. You may have benefited from rising house prices or reduced your mortgage balance through a repayment mortgage.

So congratulations – you have built up a valuable nest egg – tax free because your principal place of residence is exempt from capital gains tax.

A home equity loan is secured on your property after your mortgage. The size of your loan is determined partly by how much home equity you have but you must also be able to afford the repayments. Whilst we do not offer equity release products, older people with a lot of equity can choose to draw down their equity to supplement their income.

If you’re looking to obtain credit, our secured financing can be used for a range of purposes;

• To carry out home improvements, which is a great way to add value or living space
• Consolidation of existing debts, which could save you money by reducing the amount you are paying
• Turning multiple debt payments with different lenders into one manageable monthly payment
• Bigger personal items such as cars or caravans can be financed using a secured loan

Whatever is happening in your life right now, whatever purposes you are looking to borrow for, find out why a home equity loan could be the right choice for you. We’ve put together some frequently asked questions, to help you make an informed decision. Click on the links below for more information.

What are Home Equity Loans?

A home equity loan is a second charge mortgage whereby your home provides security to the lender in case of default.  A second charge mortgage ranks after your first mortgage. Secured loans are regulated agreements by the Financial Conduct Authority.

How do secured loans differ from un-secured loans?

Home equity loans are secured by the lender on your home. If you fail to maintain your monthly payments, your home may be at risk. Therefore lenders will often accept an application for a secured loan which they may decline for an unsecured loan. So lenders can be more flexible with secured loans and will usually offer larger sums over longer periods. Unsecured loans do not place your home at risk.

Would I qualify for this type of loan?

In order to apply for a secured loan with Arrow Loans you must fit our criteria:

• Aged 21-68
• A homeowner occupier
• Live in England or Wales
• Be able to afford the repayments comfortably from normal income

How do I apply for a home equity loan?

We are dedicated to being open and honest about the procedure for getting a secured loan through us. Therefore we have put together a guide which outlines our loan application process to help you understand every aspect.

How much can I borrow?

Home equity loans can be up to £250,000 through Arrow Loans

What is the repayment term options?

The amount borrowed can be customised to whatever suits you best. Arrow Loans offers secured loan repayments up to 180 months (15 years), which means the loan can be repaid over a term whereby you find the monthly repayment amount affordable.

Is there a lower interest rate with a home equity loan?

Home equity loan interest rates are usually lower than those for an unsecured loan. This is because secured loans can be taken out over a longer period of time and the lender has security, giving him confidence that the loan will be repaid. The size of the loan may also influence the interest rate.

Are there any fees to pay?

We are committed to telling our customers about our fees. There are NO fees or costs payable before the loan is issued. When your loan is issued there will normally be an arrangement fee of up to £495 added to your loan amount. This fee will vary as it is intended to cover our costs, such as legal and valuation, on a case by case basis. The amount you repay is clearly stated on your loan quote.

Can the loan be settled early?

Yes! Our loans are regulated by the Financial Conduct Authority so you can settle early, overpay and make lump sum payments. This can reduce the amount of interest paid on the loan, ultimately saving you money