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.
| | Secured Personal Loans - What You Need To Know AboutWritten by Tom O'donnell
Loans that are secured against property are called secured personal loans. They are suitable for when you are having difficulties getting an unsecured personal loan, are trying to raise a large amount, or you just have a bad/poor credit history. Usually, lenders are more flexible when it comes to secured personal loans, which makes them worth taking into consideration if you want to buy a new car, make home improvements, or take luxury holiday of your life.Here is a list of benefits of a secured personal loan: You have lower monthly repayments than an unsecured personal loan You can borrow more money Repayments can be spread over a longer period of time Because a secured personal loan is a type of loan available to people with securable assets (usually homes), they are often referred to as 'homeowner loans' or just 'home loans'. To be eligible for secured personal loans you don't even have to own your own home outright. You can put proportion of home that you own up as a security, if you have a mortgage. Because secured personal loans are secured on property, many of lenders will approve your loan 'ignoring' fact that you have a history of adverse credit such as arrears or even county court judgements. This makes them perfect choice for people who can't qualify for a loan from their local bank.
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