How to Find Good Deals on Loans
Loans come in a wide variety of forms, and it isn't always easy to determine which of the lending options that are available to you is the best deal for your money.
Interest rates, repayment terms, and collateral requirements are all major factors...
Loans Are Not Just For Christmas. Surviving The Holiday Debt Hangover.
Christmas is coming - A time for decorations, songs,
over-eating, gift giving, visiting the family, consumer spending
and the increasing of personal debts. Bah humbug.
While most people see Christmas as a joyful period there are
many who see...
Personal loans for bad credit can discipline repercussions of negative credit
Bad credit is like an ongoing battle for many loan borrowers. Bad credit has many repercussions for the people when they apply for personal loans. You usually are branded as a bad credit borrower if you have anywhere in your credit history terms...
Title Loans - Get More of the Title to your Vehicle
Title loans have the same features as a secured loan, except for a single aspect. While secured loans do not spell out the type of collateral that will suffice it, title loans specifically require cars or any other vehicle to act as collateral....
Unsecured business loans: apt genesis of intelligent financial management
A business requires a vision, a leadership and decision making
skills, knowledge, experience, intelligence and lots more. But
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No Deposit Home Loans
A few years ago, many of us would have had a light chuckle to ourselves if someone mentioned that you could borrow money to buy a house with only the promise of solid future earnings. But today this is a regular occurrence. Many of the industry’s non-conforming lenders are selling these financial products to many happy consumers, with most of the major banks avoiding this riskier route.
Ideally, the individuals set to gain from this product have high incomes in industries with high job security. With this loan you are presuming that the benefits of immediate ownership and debt outweigh the costs of renting. This may not always be the case however. The risk to the lender is greater and so you will pay a premium interest rate for the privilege, usually about 2% higher than the current market rate.
With this is mind, it may be time to clean the dust of the old mortgage calculator and assess the long term financial gain or speak to a financial consultant to establish whether this is a sound option for you, and for many people it can be.
Of course, there is no such thing as a free lunch and strictly speaking, no deposit means “with enough money to cover initial expenses” such as stamp duty, loan fees and mortgage insurance. If you are lucky enough to be eligible for a government first home buyers’ grant, you may have most of these expenses paid for you.
The main point
with this type of loan is that to really win you are betting that your salary will be increasing steadily over the term of the loan. This income will then be able to be ploughed back into the loan to build some equity.
In many countries, such as Australia, no deposit home loans are becoming less attractive due to the state of the market. Lenders are becoming more stringent with their loan acceptance policies, indicating a potential interest rate rise and thus much greater risk to those with no deposit home loans. The lender may also have harsh exit fees, running into thousands of dollars so read carefully before you sign on the dotted line.
Many lenders also will only lend for specific types of property, leaving well alone riskier properties in regional areas and places with no established resale value.
Here are a few tips to help you manage your financial position.
- Allow for higher interest rates when budgeting for repayments over the next 2-3 years,
- Ensure personal debts like credit cards and car loans are under control before committing to a property loan, and
- Make extra repayments where possible to reduce your exposure to higher rates and falling prices.