People are becoming more aware of the alternatives to traditional loans and mortgages that are more capable of meeting their needs. The range of financial products, in particular different types of loans and mortgages, is continuing to expand as people’s financial habits change and evolve. This evolution is a result of people’s education about what constitute healthy financial habits. Unfortunately, while people are more aware of what constitutes healthy financial habits; there are an increasing number who are not adhering to those habits. The amount of unsecured debt is increasing at an alarming rate which leaves lenders having to take steps to recoup their losses which can be detrimental for future loan applicants.

Unfortunately, the mortgage is only available to those people who own a home of other property of value. This limitation is one of the reasons why unsecured debt is unlikely to ever be completely wiped out. For many people their unsecured debt is in the form of credit card debts or in the form of unpaid bills, particularly those for your mobile phone. The total of this debt is increasing every day and some people are just incapable of clearing that debt. Often the interest rate rather than the principal amount is what composed the majority of the payments that are maid by debtors.

In a bid to reduce the amount of unsecured debt many lenders are creating additional products that encourage securing prospective loans against collateral. One of those is the homeowners’ loan that National Guarantee and other financial institutions are offering to those people who own property. The homeowners’ loan is very similar to a traditional mortgage in that it is secured against your home and thereby escapes the additional charges of unsecured debt. You can take out a homeowner’s loan while you have a mortgage if you are in need of extra money at any point in time.

Secured loans such as the homeowners’ loan are infinitely preferable to an unsecured personal loan that many people apply for. There is far more choice on the formation of the loan as well as the fact that the rates that you pay can be far lower for a loan that has been secured something of value. The amount you pay back and the length of the period over which you are permitted to pay it back will also be far more flexible for a secured loan when compared to standard unsecured loans. These homeowners’ loans are typically made use of where people have little financial liquidity, but instead have valuable assets that would otherwise be hard to transform into cash to meet the owner’s current need.