Each one of us wishes to possess a home of our own. With
some pounds in your savings accounts, it won't be possible to purchase a house
that requires a big investment. If you dream to own a home, home loans are the
best way to finance your dream.
Home loans are offered against the equity in ones home.
Equity can be defined as the value of the home after deducting outstanding
mortgage amounts and other loans. Lenders take various factors into
consideration while calculating the home equity such as location of the home,
the structure etc. The loan will be secured on the borrower's home and the
transaction will not impact existing mortgage in any way.
A home loan is basically taken to purchase or to construct a
new house. Borrowers can also use it to make home improvements, consolidating
their existing debts, to buy a luxurious car or for any other personal purpose.
The loan proceeds of a home loan can supplement both
mortgage and secured loans. Homeowners can put their existing house or real
estate as a collateral to get finance to purchase a new house. However, if you
are a tenant you can put the new house as a collateral to get a home loan.
There are various benefits attached with the home loan. Home
loans offer larger amount loan with a longer repayment term. Home loans offer
you the opportunity to borrow a loan for any amount ranging from £3000 to
£500,000. Home loans can be repaid over a period of 5 to 25 years depending on
the amount you borrow.
Home loans cater to UK residents with different loan
options, which make it easier for borrowers to repay the interest on the loan
in the most comfortable and convenient manner. Annual percentage rate or APR is
the term used to denote the rate of interest. Home Loan give borrowers the option to pay either fixed
interest rate or adjustable rate interest rate on the money borrowed. Fixed
interest rate option implies that interest rate will remain the same throughout
the life of the loan. While an adjustable interest rate would imply that the
rate of interest would change periodically with the corresponding fluctuations
in an index, with which it is attached.
This interest rate is also known as variable rate home loan.
A borrower can also opt for interest-only loan option. An
interest-only loan gives borrower the opportunity of paying just the interest
or the interest and as much principal as he wants in any given month during
initial period of loan. If you choose this option, your monthly payment will be
lower than in case of an interest and principal repayment option.
There are various loan providers in the finance market. They
may devise ways to overcharge borrowers who are not much conversant with the
ways of the market. Interest is generally charged on the higher side, and
borrowers also have to shell a larger sum as fees for the services of the
lender. Thus, a few efforts on your part can save you from paying higher
interest or huge fees to lenders.
First of all, find out your credit score. Credit rating
agencies such as Equifax, Experian or Transunion can help you get your personal
credit report. Knowledge of credit score can help to grab good rates in the
market.
Next thing you must do. Search for lenders who provide home
loans. You can apply for a home loan online too. Applying for a loan online makes
it more convenient to get a fast and cheap home loan. Saving your time and
helps you find the best deal at best rates. Most of the lenders provide loan
quotes to borrowers, which are free or carry nominal fees. Collect loan quotes
from lenders and compare them to find the best home loan.
Dream to own a home can come true with a home loan.
Homebuyers are urged to search for home loan providers and gather as much
information as possible, so that they can do comparison and shopping with an
idea of what they want, can afford, and can qualify for.
Source: http://bit.ly/2cysjp1
Use the interactive housing loan emi calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.
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