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A General Overview on Mortgages for Making the Theory Simple

It is very important that people save money for purchasing any property. But situations might occur when you find yourself in dire need of cash when you have nothing at hand. This is where the importance of mortgages comes to the forefront.

fotolia_82237011_subscription_monthly_mFAQ about loans

It is not possible for a typical person, with no idea on financial matters to know a lot about this theory. The following are some of the frequent queries, which are made, related to the topic:1200

  • What is this loan?
  • When do you need to avail of the services?
  • How will you find out which is the best scheme for you?
  • What are its basic components?
  • What are the rates of interests, which one needs to pay?

In this article, you will get some of the most important answers to these questions. This will give you a good understanding of the subject.

What is a mortgage?

If you have no idea about this theory, then this is the article that will come to your rescue. People resort to advances when they are thinking of buying a residential property. Buying a house is not a matter of joke as a lot of money is required in carrying out this mammoth venture. It is common that people might be short on liquid cash at the very time. Thus, taking a loan will help one in getting over the problematic issue.

The best loan package
No one factor goes into determining a good loan package and a bad one. While taking a loan, you need to make sure that the amount is what you require. Taking a loan that is too big or too small in amount will not help your cause. Thus, one needs to keep an eye open while estimating the cash amount that requires.
Reading the documents
A lot of documentation is necessary while taking an advance. Thus, you need to make sure that all your legal documents are in place. This will expedite the loan sanction process, and you will get out of the messy situation quickly.
More than a pre-qualification is needed
This is the principal myth that you have to get rid of. Before applying for credit, you have to give an evaluation of the measure of cash that you will require. This is called pre-qualifying. This is an essential part, which should be cleared before going for loan estimator.

the_best_candidate_for_an_adjustable_rate_mortgageTime frame of repayment

There is no fixed time frame for the refund. It will depend on the terms and conditions of the advance. As the rate of interest differs from one lender to another, in the same way, the time duration will also vary. A huge sum of money will get some time relaxation, which will be absent for a smaller amount. Thus, it is the person to choose a package according to the needs and requirements.

Some surmise that passing the pre-qualifier implies that you will get the advance. This is not valid as there are numerous different strides, which you should clear before accomplishing the objective.

 

Before signing the mortgage deal and lending you a big fat loan, a mortgage lender will ask you a series of questions. These questions will range from good to awkward and totally nosy. However, if you want to avoid answering unnecessary questions, you must learn about the questions that a lender can and cannot ask under the law.

Questions that can be asked

Your mortgage lender is allowed to ask you the following questions:

  • Income – Your lender will ask you about your current income to ensure that you are employed and earning well. They will also ask you about your income from your previous job (if any). You will also need to give information about child support and social security if you receive any. If you generate income from multiple sources, your lender might ask for details on all of them. They will also ask for proof of your income.
  • Credit History – Because credit history plays a vital role in determining whether a person is capable of handling a mortgage or not, lenders will ask you to submit a copy of it.
  • Assets – Lenders will require information on your assets to ensure that you are paying on your own.
  • Employment History – You will also be asked to submit documents proving that you have been employed for at least two years. Lenders will also ask you about your education and the contact details of your employer for verification.
  • Debts – Lenders want to ensure that they are lending money to someone who has a good record of debt payment. Therefore, there is a high chance that your lender will ask you about your debt history and ask you to submit your credit history.

Questions that cannot be asked

Lenders are prohibited to ask certain questions from applicants by law. These laws are laid in place to protect consumers from any type of discrimination, hate, etc.

  • Divorce – Many lenders ask personal questions about divorce to find out if they are in the middle of a divorce. The reason behind asking about divorce is to find out whether the applicant will lose all their money or not.
  • Ethnicity – It is illegal to ask questions about ethnicity from any borrower. There are strict laws against such questions and inquiries to ensure that no one gets discriminated.
  • Family – Lenders cannot inquire about your family. Whether they are asking questions about your family members or simply asking if you will be starting a family, it is illegal for them to do so. Many female borrowers have faced discrimination when they told lenders about starting a family.
  • Lawsuit – If you are part of a lawsuit, lenders cannot ask you about it. The reason that lenders are prohibited from asking about lawsuits filed against borrowers is that it may harm the final judgment and may cost them money.

Now that you know what questions your lender can and cannot ask you, you will be able to take control of your interview.…

Throwing a birthday party for your kid on a small budget is a situation every parent has to tackle. To make their kid happy, most parents end up spending a small fortune on birthday parties, pulling out all the stops to plan the perfect party.

However, if a big party packed with numerous activities does not fall in your budget, do not fret! Below are the things on which you can save money and still throw a fabulous birthday bash without breaking your bank account.

Venue

Most parents go all out and rent a space for their kid’s birthday. This is the place where you can save a lot of money, by hosting the party in your home. Most people usually prefer to host birthday parties in their front lawn or backyard to give the kids a place to run around and have fun. Venues in UK cost from £130 to £500, which is a dizzying amount to say the least.

Though, partying at home will mean that you will have to take care of all the details from setup to cleanup, entertainment and food. However, you can hire a cheap maid service that will cost around £50.

Cost of hosting the party at your home: £0 (~£50 if your hire a maid service)

Party Entertainment

If your kid’s birthday comes during summer, fall or spring, you can arrange a number of activities outdoors. You can organize relay races or set up games such as tug-of-war or ring toss, among others. You can even ask the guests to bring their swimsuits to play water balloon fight. Best of all, you can ask your friends to lend you some interactive games like Twister and divide the children into two teams to make the game more interesting. To organize these activities or even buy one, it will not cost you more than £20.

If you do not have a backyard to throw the party, then there are some fun filled games you can play indoors:

  • Treasure Hunt
  • Movie Screenings
  • Crafts
  • Puppet Shows

Cost of entertainment: Outdoors £10 to £20 and Indoors £10 to £50.

Birthday Party Bags

It has become a tradition to send guests home with a small birthday party bag. Buying candies or toys for children can cost you more than £50. This does not mean you forego the treats. If craft making was a part of your entertainment, send the guests home with their creations and a balloon.

Cost of birthday party bags: £0

Party Decorations

Every party requires decorations. Do not go for something huge by organizing a theme party and taking out your china. Decorate the place with a banner and latex balloons. Go for party poppers because it is one of the things kids love most. As for the tableware, you can buy colourful plastic plates, cups, utensils and napkins for £20.

Cost of decorations: Less than £50

Food

Children are quiet picky when it comes to food. A birthday party cannot survive on finger food and if you factor in food allergies, you have a problem at your hands. Go for the easy food, which every kid loves—Macaroni and cheese. Bake the cake at home with the ready-to-make cake boxes and buy snacks like chips, biscuits, pretzels and cookies.

Cost of food: Less than £80

Low cost birthdays usually require more leg work. However, throwing one at home and using the above ideas will help you significantly in saving money.…

Warning: This article contains the smartest tricks that the Houdinis of real-estate investors use in UK to break their digital currency counters.  We are here to provide you only with the basic idea. Execute it at your own risk.

I Want to Grow Old as a Lannister!

We all worry about our future. In fact, we are always striving hard to shape a better and secure future. What better way than to invest in a real-estate property, earn your rents and watch your investments soar?

But how do you do it?

You can invest your cash directly into a property. Considering you are not a Lannister or you have not inherited a large fortune, you won’t have enough of those cash resources to make for the investment.

Your savings?

Ha! The average property price in UK is estimated to be at around £273,000. Your earnings do not equal that of Bill Gates, otherwise you won’t have been reading this. So assuming you get to save £500 monthly (a far stretch in itself), it would take you precisely 46 years to own a property.  Obviously the rate of inflation has not been counted in but you can still imagine the wait.

What’s the other way around?

Buy-to-let Mortgages!

They allow landlords to buy a property with the intention of letting it out or renting it out. You just need to have the deposit money to get the mortgage. Hence many people embark on their journey to real estate investment through buy-to-let mortgages.

And you know what the cool part is?

The application evaluation process is based on your rental income rather than your own existing finances.

Mr.Broker, How Else Does this Help?

Consider this: You somehow arranged the cash and invested in a property worth £273,000. The average charged UK rent amounts to £774 per month. This calculates to a yearly rental income of £9,288. That is an impressive yield of 3.4 percent.

But, it’s time to beat it!

You approached a buy-to-let mortgage provider and agreed a loan at 75 percent to the actual value. You now have to deposit £68,250 to acquire a property of worth £273,000. Add extra charges of let’s say £4000 and this brings us to a sum of £72,250. At a mortgage rate of 2.29%, your annual interest repayments rise to £6,240.

What was your annual rental income? £9,288! Subtracting your interest repayments you are left with £3,048 an year. Calculate the yield on the mortgage and this produces 4.2 percent.

What was your return, when you invested in cash? 3.4 percent.

We finally have the winner!

And with the increase in property valuations, your equity in your new property can rise to figures where you can afford another mortgage.

Not difficult to sit amongst the Lannisters, isn’t it?

Taming the Taxman!

As for suggestions to reduce your taxes which come with buy-to-let mortgages, you can always try some of these:

  1. Offset your stamp duty against the CGT liability when you sell your property.
  2. Income tax can be offset against various claims of allowable expenses. These could be arrangement fees for property loan setups, building insurance, council tax and utility bills if your tenant is not supposed to pay them.
  3. CGTs can be reduced through private residence reliefs and lettings reliefs.

So did you like the idea? Remember, to proceed with caution. For an idea can define or destroy you!

Any person who is unable to pay the debts he owes to his creditors may be a potential candidate for declaring bankruptcy.  Most individuals who have been caught in the debt trap or have lost all their savings may well have become unwitting victims of ‘excessive consumer spending’. Consumer debt typically consists of (ostensibly affordable) car loans, home finance and even monthly credit card payments.

You may need to file for bankruptcy in certain circumstances when your creditors send you more bills that you have the financial capability of paying or after having become insolvent.  This may be for the following reasons

You Cannot Keep Up With Your Ever Increasing Debt

If you find yourself paying  bill after bill and have lost all track of both interest as well as principal amounts and are not able  to pay even minimum amounts every month just to keep your ‘head above water’ so to speak even as the interest payments keep on increasing. Then you are definitely a candidate for declaring bankruptcy.

Even Living Expenses Seem Out Of Reach

Basic expenditures that are part and parcel of everyday living such as food, utilities, housing expenses, schooling for the children, clothing etc must be well within the financial reach of almost every working individual. If that is not happening and  you find that you are actually struggling to meet even the most basic requirements of both you and your family while simultaneously doing your utmost to pay your bills, something is very obviously wrong. If you find that the most basic of expenses have to be met through the usage of ‘high interest rate ‘charging credit cards and now you can’t keep up even with your day to day expenses than you need to think about the fact that bankruptcy may be the only viable option.

Losing Most If Not All Of Your Property

In bankruptcy the unfortunate insolvent ends up losing his property. Typically, a trustee is appointed by the court to handle the required bankruptcy paperwork and oversee the sale of the property of the person who has declared himself bankrupt. The proceeds from the sale of this property are than utilized to pay off either all or as many of the creditors as can be reasonably covered through such a sale.

To lose all of one’s property and watch it being auctioned off in front of one’s own eyes is certainly not a pleasant experience, so make sure that you do this only and only if you have no other viable options.

Explore Other Options As Well

Regardless of how desperate a situation may seem, there are generally other options available. If its debts that are creating a problem, then you may consider hiring the services of a credit management agency that will help you discharge your debt obligations in an orderly manner.  Alternately you may talk to your creditors on your own and try and convince them to give you more time.  Then there are friends and family members you may approach who just might be able to help tide you over till you regain your financial footing.…