Unless you are born into a wealthy family and never have to worry about finances, at some point in time you are going to need extra money. How do you get extra money? You take out a loan. No, I do not mean you should borrow the money from your sweet old aunt or your friend that owes you a favor. I mean a real loan, one you have to apply for at a financial institution. There are several different types of loans.

A payday loan is when you go to one of those check-cashing establishments with a current paycheck stub. You verify that you are employed and the amount you make and they give you a loan until you next payday.

Mortgage loans are those big old loans that you have to take out when you purchase a new home. These loans offer payment plans with fixed and variable interest for ten, fifteen or thirty years. Talk with the financial officer about your situation and they will help you determine the best mortgage loan to suit your needs.

There are also loans for debt consolidation or bad credit. These loans help you to pay off your debts in one lump sum and then pay them back instead of making payments to several different companies in a month.

There are loans for cars and loans for opening businesses as well. If you need money, more than likely there is a loan for you.

adminLoans14 Jun, 2008No Comments

One of the factors lenders consider before they approve a mortgage is the loan-to-value ratio (LTV). The LTV is the loan amount expressed as a percent of either the purchase price or the appraised value of the property. So, if you make a 20 percent cash down payment on a property you’re buying, the LTV is 80 percent. Or, if you’re buying a property for $250,000 and the mortgage amount is $200,000, the LTV is 80 percent (the $200,000 loan amount divided by the $250,000 purchase price).

A mortgage with a high LTV is one where the mortgage amount is high relative to the borrower’s cash down payment or to the equity in the property. For example, if the LTV is 95 percent, the mortgage amount is equal to 95 percent of the purchase price and the buyer’s cash down payment is equal to only 5 percent of the price. From a lender’s perspective, a high LTV mortgage is more risky than one where the LTV is low. When borrowers make a large cash down payment, or have a large equity in a property, they are less likely to default on the mortgage. Borrowers with less equity in a property have less to lose which puts lenders more at risk.

adminLoans7 Mar, 2008No Comments

A simple interest loan is one where you only pay interest on the original prinicipal and not on the interest that has accrued. These loan are usually only used when the loan is in excess of $25,000 and/or the term exceeds 60 months.

I would select a traditional mortgage. If two loans are exactly the same but one is simple interest, you will pay more interest on it unless you systematically make your monthly payment before the due date.

The major difference between a standard mortgage and a simple interest mortgage is that interest is calculated monthly on the first and daily on the second.

Consider a 30-year loan for $100,000 with a rate of 6%. The monthly payment would be $599.56 for both the standard and simple interest mortgages. The interest due is calculated differently, however.

On the standard mortgage, the 6% is divided by 12, converting it to a monthly rate of .5%. The monthly rate is multiplied by the loan balance at the end of the preceding month to obtain the interest due for the month. In the first month, it is $500.

adminLoans7 Mar, 2008No Comments

Check cashers, finance companies and other businesses may offer you small, short-term, high-rate lending known as a cash advance loan. (Also called a check advance, post-dated check, or deferred deposit check, or payday loan.)

Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow plus a fee. business cash advance, cash advance no faxing, cash advance loan? The company gives the borrower the amount of the check minus the fee. Fees charged are usually a percentage of the face value of the check or a fee charged per amount borrowed ? say, for every $50 or $100 loaned. And, if you extend or roll-over the cash advance loan ? say for another two weeks ? you will pay the fees for each extension.

Under the Truth in Lending Act, the cost of a cash advance loan ? like other types of credit ? cash advance online ? must be disclosed. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).

adminLoans7 Mar, 2008No Comments

Interest-only mortgages are pushed aggressively nowadays by lenders and brokers, but they’re not for everyone. An interest-only mortgage might be a good fit for: someone whose income is mostly in the form of infrequent commissions or bonuses; someone who expects to earn a lot more in a few years; someone who truly will invest the savings on the difference between an interest-only mortgage and an amortizing mortgage, and who is confident that the investments will make money. Financial advisers don’t recommend interest-only mortgages to regular wage earners who take out moderate-size home loans and don’t have a strategy for investing the savings.

There are some great interest only loans available online.

adminLoans7 Mar, 2008No Comments