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What You Need to Know About Mortgages August 19, 2017

 

There comes a time where we have this chance of fulfilling our dreams of buying our own home. With the help of a mortgage, buying your own home becomes more affordable and allows us to spread out the price of the property over a long period of time. Mortgages have been an essential way to help purchase properties. It allows an opening for everyone to be able to purchase their own home by identifying how much they can pay for on a term.

Mortgage Loans

A mortgage is a debt instrument where the real property is secured by the lender as a collateral and the borrower is obliged to pay for a long period of time. The payment made by the borrower includes interest which covers the payment for using the lenders money. Over the years, the borrower continues to pay the amortizations and interest until eventually the lender’s ownership over the property is cleared and transferred to the borrower.

Mortgages come in two forms. First is the fixed rate mortgage where the borrower is obliged to pay a fixed interest rate over the life of the mortgage term. On the other hand, a mortgage may be in the form of adjustable-rate mortgage where the mortgage’s interest is fixed for an initial term where at the end of the initial term, succeeding interest payments will be dependent on the interest rates within the market.

Mortgage Rates

Like any other loan in Singapore, an interest rate needs to be applied on the loaned amount. Mortgage rates are rates of interest charged on a mortgage. These rates can either be fixed as pre-determined by the mortgage lender or fluctuate with the market’s benchmark interest rates.

The best basis for identifying a high or a low mortgage rate is the a 10-year treasury bond yield which rises and fall with the mortgage rates. And there are instances where a mortgage is payable for 30 years, based on statistics, many mortgages are paid off or refinanced for a newer rate within 10 years.

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Categories: Loans

Tips on Getting a Personal Loan April 19, 2017

There are times when we find ourselves in a situation when we need extra cash for some of our spending. These maybe for car or household repairs, emergency medical expenses, or even debt consolidation. These types of spending may be addressed by a personal loan.

Personal loans are unsecured loans where the borrower is given a certain amount by the lender and is paid over the loan term with a specified amortization amount. These amortization payments include interest rates that are considered “rent” payment for the use of the lenders money. A personal loan does not require any collateral to support the loan and does not need to be used on a specific purpose.

Unsecured Loan

A personal loan is considered to be an unsecured loan. Most lenders do not require any collateral for a personal loan and because of this, most financial institutions who grant personal loans charge a higher interest rate compared to other types of loans that are secured. The reason behind this is that the lender will try to recover the principal loan amount in the fastest time possible to minimize the risk of loss from lending the money. Interest rates, financial charges, and other penalty fees are often high. This is why it is necessary to consider the interest rate when you decide to avail of a personal loan.

Unsecured loans are riskier for the lender. The best a lender can do is find a guarantor who will also be liable to your loan under the same conditions as yours.

Multi-Purpose Loan

It is not the lender’s choice on how you will use the proceeds of your loan. For the lender, they will consider it as a multi-purpose loan. All the money lender can do is check where you plan to use the proceeds but may not hold you to it. It will always be the borrower’s prerogative on where the proceeds of the loan will be used.

Being a multi-purpose loan, it is essential that you stick to the plans on where you will be using your money. Losing discipline may mean using the proceeds of the money for other stuff that are not really needed.

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Categories: Loans

Tips on Getting a Payday Loan March 19, 2017

Most people are aware of a payday loan and they do avail this offer from lenders. It may be for an emergency spending like medication, minor car or household repair or even making a payment for an overdue bill that needs to be settled. When planning to get a payday loan, it is very important that we are aware of the high interest rates, the collection, and post-dated checks required.

Payday loans can be helpful but can also prove to be a burden. We need to be aware of what the purpose of a payday loan is and up to what extent it should be used. Here are a few tips you may need when getting a payday loan:

  • Compare Interest Rates

When you plan on getting a payday loan, don’t jump into signing with a lender. Try to look for a lender who offers the smallest interest rate. Two percent to five percent difference can actually make a big difference. It is never good to let go the smallest savings you can get from payday loan lenders. Try to make sure that your obligation is at a minimal to avoid getting into the same predicament the following month.

  • Avail the Minimum Amount Needed

Knowing how much money you need is the first step. Never take a loan where you will let the lender decide how much you should take. Allowing this will only get the lender to take advantage by granting you a loan much higher than what you need. In these cases, you end up paying more interest as the higher the loan amount gets.

  • Avoid Rolling the Debt Over

One of the best principles to abide by when getting a loan is to remember that debt is never your friend. Getting a loan and thinking that you would be able to pay it next month is the biggest mindset you can have when getting a loan. When you become too confident that you can pay off a loan, you will probably end up rolling over your debt and avail of an additional loan in the end. This will never be good on your pocket.

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Categories: Loans

Tips on Getting a Mortgage February 19, 2017

Property sales are continuously increasing over the years and mortgage loans have been skyrocketing for the past several years. The mortgage rates are still low because of the high demand that it is currently getting. Mortgages help in making a purchase of real property affordable. If you are one of those who plan to purchase real property, here are a few tips you may want to check out to maximize your intention to buy real property.

  1. Make Sure that You Have Savings

Mortgage lenders want you to be liquid. Ensuring that you have enough money in savings despite of having a mortgage is the best way to go about it. Make sure that you have enough money in your savings to help you in emergency cases where you need to take care of unexpected expenses without ever having to miss out on your amortization payments. Your savings will be your fallback for any concerns that you might encounter during the term of the loan.

  1. Create a Plan

Make sure you have a plan when making a mortgage loan. Knowing what to do and how much you need will be very important in managing your debt. Being aware of the circumstances by having a plan will lower your risk of defaulting payment and paying for additional finance charges and penalties.

  1. Borrow What You Need

As with any other loan, you will need to ensure that you are aware of how much you need. Getting more than what is needed may cost you more spending and availing of a mortgage loan that is understated may cause you to have insufficient funding for the purchase of your desired property. By borrowing what you need, you start living within your means. This allows you to avoid stretching your income over the course of the loan period.

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Categories: Loans

When Is the Right Time for a Business Loan? January 19, 2017

If you are a serial entrepreneur, you would be familiar with what a business loan is and how it works. A business loan is a type of loan granted by a lender or any financial institution that is specifically used for the needs of your business. This type of loan cannot be used for any purpose but only for the purpose of your business operations. It can be for raising capital to grow your business, expanding to other location, or even consolidating the various debts that a business may already have. A business loan can be a good partner or become your enemy as it can make your business succeed or break it.

But when is it the right time to acquire a business loan? Here are some of the tips to share to know if you need to start talking to your financial advisor for a loan.

  • There is an opportunity for growth.

When you look at your statements, you will be able to identify if your performance is already at a maximum and you can still find room for growth. Growth is good but growing means spending. When you find your business in a situation where you can increase your inventory, expand to other location, or even increase manpower, a business loan is needed to support these.

  • Increasing Capital

There are cases where a business requires to have a certain degree of capital before undertaking with another entity either as a business partner or supplier. Having an increased capital gives your business a good reputation of being stable. By raising your capital through a business loan can grant your business to meet the requirements for this engagement.

  • Debt Consolidation

There are cases where debt consolidation is being required by the business for better tracking or even for lowering interest payment costs. A business loan can cover this debt consolidation strategy and put all debts under one loan. It helps the business keep track of the amortization due and amount.

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Categories: Loans