Mortgage Home Loans – The Way to Your Dream Home

Majority of Americans cannot own a house without mortgage home loans. Well, another option is to inherit a house. We, as a community purchase everything on loans.

Lenders change their attitude toward borrowers according to different factors. If the economy is going up, lenders are after the borrowers. When the economy goes down, borrowers find it increasingly difficult to secure a home loan. However, you can find a home loan irrespective of the economic conditions.

Different Types Of Home Loans

You can get home loans to buy a house and property. You can also use equity on your home to get secured loans. The types of loans available are home equity loan and line of credit.

Both are almost the same. However, in the latter case, you have the choice of paying interest only. In case of home equity loan, you need to make a fixed monthly payment.

Fixed Rate And Variable Rate Loans

Fixed rate loans have a fixed interest rate throughout the loan period. Variable rate loans can change interest rates. The rate can go up or down. When the interest rate lowers, you can repay more of you debt. If the interest rate goes up, it becomes difficult for the borrower.

Amortization And Negative Amortization

Negative amortization as a loan option was not available to American homebuyers two decades back. The principal amount or total loan amount increases every month. This happens because the amount paid in the month is less than the interest for that month. The remaining interest adds to the principal. Thus, your loan amount increases every month. However, such arrangements are available only for periods of up to two years. You will then make bigger payments for amortization.

Amortization is the gradual paying off of your loan. You make regular monthly payments. You pay off all the interest for that particular month. You will also pay some principal. This way, the principal amount reduces every month.

Just as you can imagine, negative amortization is not advisable. However, people are attracted to such arrangements because of low initial payments.

How Can You Qualify For A Home Loan?

You can get up to 80% of the home value as loan. Almost anyone who can make a 20% down payment can get mortgage home loans. You also need to prove that you have the income to repay the loan amount.

The interest rates vary depending on your credit score. If you have bad credit score, the interest rates will be higher. There are lenders who specialize in bad credit loans. This is because of the higher interest they can charge.

A home purchase is one of the biggest financial decisions you make in your life. A good knowledge of the kind of mortgage products available to you will help you make good buying decisions. Make the mortgage home loans work for you – never the other way round.

Real Estate Investing – Different Modes of Financing in the Real Estate Business

There are certain popular modes of real estate financing including lending institutions, savings banks, commercial banks, investment banks, insurance companies, credit unions, brokers and individuals. The mechanics of each kind of financing differs from the other in certain ways and it is very beneficial to understand different modes of financing so that you can choose the one that suits you best.

Financing from banks:

This is the most commonly used mode of real estate financing. Commercial banks are the kings of this game. They can offer bigger loans for relatively longer period of time and at the lowest percentages. But commercial banks have a very strict system of evaluation for potential loans. In the current economic slump it is quite difficult to qualify for a bank loan. The other problem is that banks have a system of proposals and approvals which can take a lot of time for your actual disbursement. It is very likely that your seller will not be able to wait for such a long time.

Refinancing:

In technical terms, you can say that refinancing means securing a new loan in order to get rid of an old loan on the same property.

There are many reasons why people opt for re-financing their loans. Reduction in interest rates, extension in payment date or simply spreading the repayment over a longer period of time, are some of the reasons why people go for refinancing. Refinancing changes the amortization schedule of your loan resulting in reduced monthly installments

Bridge loans:

These are type of loans are used as an emergency measure in order to prevent foreclosure of a property. The bridge loan is repaid later. The rates of bride loans are higher than the usual bank loans. They are also for shorter period of time. They do not take as much time as required by banks to process an application.

Equity loan:

In this type of real estate financing, the equity in the property is used as collateral. A lien is marked on the property which results in its reduced worth. In order to secure such a loan, you must possess impeccable credit history. Equity loans are further divided into two categories: Closed end and open ended.

Since these loans are secured against the property, they are commonly referred to as secondary mortgage. The main difference between a home equity loan and home equity lien is that the later has an adjustable interest rate and it is of revolving nature. Whereas equity loans often come with fixed interest rate and is disbursed in its entirety

Private lenders:

There are people who have extra money in bank accruing a very low interest rate. They want to invest in real estate in order to get more return on their money. Since the loans are considerably secure in a real estate project, these people can lend you their money if you can satisfy them regarding the feasibility of a project. These people are not professional lenders and it is relatively easier to deal with them regarding the terms and conditions of the loan.

Unsecured lines:

You may not know it but you already have a real estate financing facility available with you in the form of your credit card. Credit cards are the best source for short term financing. You can get your limit enhanced and negotiate better terms if you make up your mind about using your credit card for investing in real estate. But you must always keep in mind that your unsecured lines must not be used for entertainment or buying latest gadgets.

Car Loans Financing – New Car Vs Used Car

Nowadays, cars become a must thing for everyone to have at least one. By having a car, it helps us to move around and not too much depend on public transport. It can help us in all our daily activities from going to work, buying groceries or even to hospital/clinics whenever there is an emergency. But having a car is not as easy as what most of us think, we need to plan carefully our budget constraint, car type, maintenance cost, and after sales services. Beside this, there are a lot more factors that we need to consider before deciding on buying car.

If you don’t have enough cash on hand to buy car on cash basis, you don’t have to worry too much as there are lots of dealership or lending institution out there such as a bank or credit union already have programmes that can suit your financing need. It is a good advice for you to get your financing plan ahead of time before you walk in to the showroom to negotiate with the price tag on car. The foundation is same like all the business transaction, buying and selling always involving a negotiating skill. If you know how to negotiate your chances to get a lower price on car is always there for you. So, the reason why we ask you to come out with a proper financing plan is to increase your negotiation power so that you’ll be able to get more attractive deal from the dealer. It is true, that most of the dealer already has an arrangement with a bank for financing, but again having cash in hand may give you an advantage.

When you already qualifying for used auto loan, you will be given certain form to fill out and the lenders will start to conduct the usual basic credit check on you. They will let you know how much you can borrow and a set of monthly repayment for you to choose from, base on your preference. Then, now you are ready to doing shopping. Once you have found the used car you want, being inform you are already approved for the loan, the car detail will be sent to the lender who then will pay the car cost to the lender. You should aware that most of the time, bad credit auto loans are more expensive in terms of interest rates, but still offer lending options for those trying to buy a used car on credit basis.

Buying a new car is a big investment as it involve a huge sum of money, but luckily enough in car loans, especially new car loans most lenders are ready to offer you a longer time to pay the car loans. Lenders are willing to offer a longer period base on the facts that the cars is new and will lasting longer and performing better compare to a used cars. Nowadays, lenders are become more creative and you shouldn’t be surprise as some of lenders are even offering you as much as 9 years repayment period on new car loans.

Just for your knowledge, car loans are secured against the car. The more valuable the car, then the lenders will offer you more money so that you will be able to buy the car. In addition, in most case interest rates on new car loans are always lower than a used car loan. And some dealership are even offering new car loans with little or zero interest at all in some special package which normally relates to your credit score and also the repayment period on the car cost.

Auto industry is a fast growing industry and every year the car loan program is becoming more and more attractive and flexible as the lenders are becoming more creative and they always come out with a new programme that can suit almost everyone financing need. Just remember before you are deciding on whether to buy a new car or a used car, you should aware the pros and the cons of your decision.