Reverse Mortgage ExplainedWritten by Ken Chukwell
Can't remember how many times I've been asked "What is a reverse mortgage"? Reverse mortgages are a great way to get a loan using your primary asset. As in all cases of financial lending, flexibility comes at a price. A reverse mortgage is a loan using your house and is referred to as a “rising debt, falling equity" kind of deal. To compare reverse mortgage to a more traditional one, type of mortgage commonly used when buying a house can be classed as a “forward mortgage”. To qualify for forward mortgage, you must have a steady source of income. Because mortgage is secured by asset, if you default on payments, your house can be taken from you. As you pay off house, your equity is difference between mortgage amount and how much you’ve paid. When last mortgage payment is made, house belongs to you. On other hand a reverse mortgage process doesn’t require that applicant have great credit, or even that they have a steady source of income. The major stipulation is that house is owned by applicant. Generally, there is also a minimum age required as well, older applicant, higher loan amount can be. As well, reverse mortgages must be only debt against your house. Differing from a conventional “forward mortgage”, your debt increases along with your equity. Instead of making any monthly payments, amount loaned has interest added to it - which eats away at your equity. If loan is over a long period of time, when mortgage comes due, there may be a large amount owed. Furthermore, if price of your home decreased, there may not be any equity left over. On flip side, if it was to increase, this could allow for an equity gain, but this isn’t typical of marketplace.
| | Pay day loans - Short term helpWritten by Tony Forster
Payday Loan "I just need enough cash to tide me over until payday." Sounds familiar to you? I'm betting it does. We constantly find ads to this effect on radio, television, Internet, and even in mail. The type of loan being referred to, of course, is payday loans. And they come at a very high price, too, by way. Payday loans have become a way for people to get fast cash. Check cashers, finance companies and others are making small, short-term, high-rate payday loans that go by a variety of names. Sometimes, they're called cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans. But how do payday loans work? Well, usually, a borrower writes a personal check payable to lender for amount he or she wishes to borrow plus a fee. Afterwards, company or lending institution would then give borrower amount of money in check minus fee. The fees charged for payday loans are usually a percentage of face value of check. Sometimes, fee may be charged per amount borrowed. For instance, for every $100 loan you borrow, you get charged a fee of $50. If loan is extended, a process referred to as "roll-over", you are obliged to pay additional fees that could incur. So for example, you make an extension of two weeks for your $100 loan. That means, you pay a total of $150 in fees, provided that one week equals to a $50 fee. The Paperwork
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