By Alan Lim Learning about the variables that impact loan rate figures is simple when you access the great resource web site found at Home Loan Rate or Home Loan. Check out the tips, links and cautions available here. Article Source: http://EzineArticles.com/?expert=Alan_Lim
Type of loan
The type of loan that you select has a significant impact on the home loan rate. A variable rate loan may start out at a low rate and quickly escalate to a much higher rate. In fact, this is one of the major reasons why homeowners find themselves in trouble when they purchase a home with monthly payments that are at the limit of their personal affordability and then the payments increase because the interest rates increase. A fixed interest rate may cost slightly more than a variable loan to begin with, but you know what the rate will be in two years.
Economy
The economy of the nation has an impact on the home loan rate, particularly if the loan as a variable rate loan. Often the loan rate is tied to the prime interest rate plus a certain number of points. Of course, when the economy is slowing down, loans are somewhat harder to get and the qualifying process may be more stringent. When the economy is booming and loans are easy, more people can qualify to get a mortgage loan because the restrictions are less onerous. People are more willing to take a chance on a larger loan when they feel positive about the state of the economy.
Credit score
When applying for a new loan, the loan broker will almost always check the credit score before deciding what the home loan rate will be. The higher the credit score of the potential borrower, the better deal can be put together with the broker. Conversely, if the credit score is low or if there is little credit history, the loan is likely to cost more or require a higher percentage of the total as a cash down payment. Careful attention to making mortgage payments in full and on time will allow the borrower to create a new a better credit history so that a refinance later will have a better rate.
Loan Term
Theoretically a loan can be for any length of time, and this factor is one that many potential borrowers don't think about. They just assume the best home loan rate will be at a 30 year mortgage term. Even conventional loans can be taken for 15 years, 20 years or 25 years. Shorter term loans cost much less in interest over the term of the loan, so even at a higher monthly payment and the same interest rate, the shorter term loan is a better deal, with significantly less money paid in interest.
Balloon payment
Another common way to structure a mortgage loan that will affect the home loan rate is whether or not there is a balloon payment attached to the payment of the loan. Often a mortgage will be structured to run for two or three years with a very low interest rate at the end of which there is a balloon payment that is the balance of the loan. At the end of the initial period, often the rate will increase, or the monthly payment will jump. Sometimes the entire loan is refinanced at that point.
Learning about the variables that impact loan rate figures is simple when you access the great resource web site found at Home Loan Rate or Home Loan. Check out the tips, links and cautions available here.
Sunday, June 1, 2008
Home Loan Rate - What Are The Variables That Affect The Rate
Tuesday, April 8, 2008
Tough market for used cars
Experian, the global information services company, has released its latest used car sales statistics. They show a further drop in sales during 2007 and come with a warning for dealers that there may be little change in 2008 as consumer sentiment remains cautious.
Despite the overall fall in used car sales, older cars aged between 5 and 7 years old recorded an increase in sales of 3.3% - more than any other age group.
Kirk Fletcher, Managing Director of Experian's Automotive division says: "The popularity of older cars may be linked to the increasing difficulty consumers are facing when trying to get a bank loan and with older cars costing less; consumers can either pay for them outright or get a smaller loan."
As in previous years, the MPV, SUV and sports segments have continued to increase in sales, despite a fall in all other used car segments. Sales of used MPVs in particular started off strong at the beginning of 2007 (up 11.2%) and, while sales continued to increase, the rate of growth slowed during the following two quarters (5.4% and 3.3%) but rose again towards the end of the year (8.4%), to end the year 6.9% ahead.
Older MPVs (over 3 years old) saw the biggest growth in sales. The Renault Scenic was the most popular selling used MPV during 2007, with models aged over 10 years old seeing the biggest growth.
Similarly, within the SUV segments, the biggest growth in sales during 2007 was in the older models. The Toyota Rav 4 model was the most popular selling used SUV model during 2007, with those aged between 5 and 6 years old seeing the biggest growth, followed closely by those over 10 years old.
Within the sports segment, the Toyota Celica was most popular selling model during 2007 and those aged between 6 and 7 years old saw the biggest growth.
Fletcher adds: "A slow housing market and the squeeze on spending has left consumer confidence low and this, in turn, hit the used car sector hard last year. The industry recorded the highest drop in sales (down 2.4%) since 2005, when used car sales first started falling.
"The new car market, in contrast, saw a revival of sales last year, indicating that there is still a willingness to spend on a car. However, the new car market is particularly competitive at the moment, with manufacturers launching new models and marketing them fiercely.
"Topped with discounts and promotions, used car dealers are having to work harder to attract customers who are seeing the value of buying a new car over a used one."
04 April 2008 © Moneyextra.comNews From : http://www.moneyextra.com/news/news-tough-market-038624.html
Installment Loan Versus Line Of Credit
By: Peter Kenny
here are times when consumers simply need to borrow money. As most people know, there are many different ways to borrow money. Two of the most common ways are through either an installment loan or through a line of credit.
Knowing the difference between the two can be important. One of the best ways to make your choice is to know which type of loan will best suit your needs.
A line of credit offers most consumers a more flexibility type of loan than a installment loan. With a line of credit the borrower can take out funds whenever they are needed. There is no need to take the funds out in one lump sum, which is what happens with an installment loan. A line of credit, once it is approved, does not require the borrower to apply over and over again, unless the total loan amount is withdrawn.
Another important difference between the two types of loans is that with an installment loan your payments will be set and they will not vary as the loan term moves through time. With a line of credit, the monthly payment will depend on the amount of the total that has been withdrawn. In other words, the more you take out, the more you pay each month.
A very unique benefit to a line of credit is that it can also be revolving credit. What that means is that when you take a certain amount from the total and then pay that amount back, the total goes back up to where it was. For some consumers, this can be a more affordable way to make purchases than using installment loans.
A line of credit is usually reserved for those who have some high-dollar asset that can be borrowed against. For the most part, this is a home. Consumers should understand that any property that they put up for collateral can be seized by the lender if the terms of the loan are kept.
For a one-time borrowing need, with uncomplicated repayment options, an installment loan is probably the better choice. With an installment loan, you get a lump sum check and the payments are worked out in advance so that you know exactly what you owe each month.
Generally speaking, installment loans are easier to get than line of credit loans. With an installment loan, you may or may not be asked to put collateral. When collateral is used for an installment loan, the same conditions apply, in that if the loan terms are not honored, the collateral can be seized by the lender.
As mentioned above, with an installment loan you receive a lump sum. With the line of credit loan you will normally receive a check book that you can use to withdraw funds. This can be especially helpful for things like home improvement projects where you may have to pay several different people and several different times. It also allows you to keep your loan funds separate from your personal funds if you wish to do so. This makes bookkeeping much easier.
Article Source: http://www.isnare.com/?aid=221719&ca=Finances
Sunday, April 6, 2008
More people lie to get credit
Research by CIFAS - The UK's Fraud Prevention Service - reveals that more people are lying on application forms to obtain credit, insurance and other products; that they are getting into financial difficulty sooner; and are turning to fraud at an earlier age. The research looked at the application fraud cases filed on the CIFAS database, comparing the situation in 2004 with that in 2007. It found that the number of application fraud cases filed on the database rose from 62,000 in 2004 to 77,000 in 2007, an increase of more than 24%.
In each of these cases, individuals had told lies ("material falsehoods) on the application form, or had supplied false or altered documents to support their application. In 2004, just over one in every 10 fraudulent applications was successful, resulting in 7,200 cases where the fraudster obtained the product he or she had applied for. By 2007, that had risen to almost one in 5, resulting in 14,500 cases of the fraudster being successful.
Products where fraudsters have seen increasing success since 2004 include: bank accounts, plastic cards and to a lesser extent mortgages.
The lies most frequently told on applications include:
Lying to conceal a poor credit history. Fraudsters recognise that a poor credit history will affect the outcome of the application, but fail to realise that verification checks are made. More than 64% of the application frauds filed on the CIFAS database fall into this category.
Exaggerating the length of time the applicant was resident at an address. Fraudsters believe that stability increases creditworthiness but don't realise that verification checks are made. 13% of the application frauds filed on the CIFAS database fall into this category.
In addition, the use of false documents to support an application has increased considerably since 2004. The false documents most frequently used to support an application are passports, utility bills and bank statements.
In 2004, 68% of application fraudsters were men and 32% were women. Although by 2007 the shift was small, with 66% male fraudsters and 34% female, this was the first time that women represented more than one third of all application fraudsters.
In 2004, fraudulent applications from men tended to be for asset finance (mostly for cars) and bank accounts, women were more likely to apply for loans and plastic cards. By 2007, male fraudsters were more likely to apply for asset finance and insurance, whereas female fraudsters were more likely to apply for communications products (mobile phones) in addition to plastic cards.
The research revealed that the top five postal districts where male application fraudsters live are SE (South East London), then E (East London), B (Birmingham), N (North London) and M (Manchester).
For female fraudsters, the top five are: SE (South East London), then E (East London), B (Birmingham), G (Glasgow) and N (North London).
17 March 2008 © Moneyextra.com
News Source : http://www.moneyextra.com/news/news-more-people-038330.html
