Partly fuelled by the global credit crunch, which made its way across from the United States last summer, a number of radical changes have occurred in the UK when it comes to the housing and finance sectors over recent months.



House prices have been falling steadily over recent months, and are expected to continue falling over the next year at least. At the same time borrowing costs have been rising, and a number of lenders, both secured and unsecured, have increased the rates on their loans over this period of time.





With this in mind homeowners that are considering taking out a homeowner or secured loan should think carefully before making any commitment, as there are increased factors and risks to take into consideration.



Secured loans have become increasingly popular over recent years, with many homeowners taking advantage of competitive rates of interest as well as making the most of their increased equity levels.



However, one increased risk that homeowners need to take into consideration is that house prices are set to continue falling, and those that do not have a sizeable level of equity in their home could find that they are facing negative equity if they secured another loan against their home in addition to their mortgage. This is where the amount that is owed on the property is higher than the actual value of the property.



Another thing to consider is that the interest rates on secured loans is variable, and recent reports have shown that whilst the base rate has remained static over recent months a number of lenders have increased the interest rates on their secured loans.



You have to be mindful that, as with your mortgage, failure to make repayments on a secured loan could result in the loss of your home, and if interest rates on these loans continue to rise, thus pushing up your monthly repayments, you could find that you are no longer able to keep up with repayments.