5 Different Types of Mortgages

When you enter the market to get a home loan or mortgage, you are presented with a number of options to choose from, each with their own unique advantages and disadvantages. Some may have low interest rates, some may have greater repayment flexibility, while others can be taken for a particular period. If you are looking at getting a mortgage in San Diego for instance, I would always suggest using something like a san diego mortgage calculator to see what your potential monthly repayments would be and how to get the best deal possible.

That way your are able to select a mortgage plan that suits you, for which you are eligible, and make sure it meets your requirements and benefits you the most. Here are different mortgages types you should be aware of.

1.     Tracker Mortgage

One of the types of variable rate mortgage is Tracker Mortgage. The Bank of England sets the interest rate of this mortgage. The deal on this loan lasts for the minimum of one year and maximum of the total life of the loan. You will be transferred to the lender’s SVR (standard variable rate) as soon as your tracker deal ends. They also have higher interest rates.

2.     Closed Mortgage

According to the agreement, you cannot refinance, prepay, or re-consult closed mortgage until and unless it does not mature. However, all of this can only happen if the terms of the agreement were amended before signing.

3.     Pension Mortgage

If you already have a personal retirement savings account (PRSA) or personal pension plan, or you are a proprietary director, who has occupational pension scheme, you are eligible to apply for pension mortgage. Pension mortgage will get you lesser money as compared to the annuity mortgage. The mortgage is paid by cashing the personal pension policy. You will be paying the interest on the amount you borrowed and monthly payments until then. There is also a tax relief on the pension payments, so make sure to discuss the paying options with your lenders.

With time, the value of pension policy will increase, and you will be able to clear your loan by the time you retire. This policy will also get you the pension income. There will always be a chance that you might not be able to pay off the original loan amount. In such a situation, you will get smaller amount of income when you retire.

4.     Fixed Rate Mortgage

The best part about a fixed rate mortgage is that the interest rate will remain constant —whether it is for a year, 5 years, or even 10 years. Once the rate is fixed, you will know the cost of your mortgage, and you will be able to set a date by which you will return the entire amount.

5.     Discount Mortgage

The term discount mortgage is self-explanatory. You will be getting discount off the standard variable rate (SVR) of the lender. This is normally for a specific period of time, which ranges from two to three years. However, it does not necessarily mean that the interest rate will also be lower. Initially, the cost will be low so you will be making affordable monthly repayments, and with the cut in SVR, the monthly amount will reduce even more.

Choose the mortgage wisely by comparing them with each other and your needs and requirements.

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Can Going Cashless Save You From Overspending?

“Overspending is a very attractive trap. If people like what they are doing, despite the worry of debt, they won’t do anything about it” – Adriane Berg

We live in the times where instant gratification has finally been wed with the  dream of  “everything at an easy disposal’. Overspending doesn’t seem to be a problem which could be controlled very easily. And though the mind warns against the hazards, the heart desires— well, what the heart desires. The consequent glaring debts and the closets filled with items one wouldn’t need in the next 365 days or perhaps 6 years either signal one thing: a dire need for savings.

And the next big question arises about how one could go about saving while there is so much to do and perceived needs must be analyzed too.

Going ‘cashless’ is one idea which is said to have saved many cases of overspending and has some of the splendid benefits which results in control over overspending. Though with the ease of credit and debit cards at one’s disposal, cash plays the pivotal role when it comes to overspending. Hence it has to be targeted first.

Going cashless has its own benefits for people with a habit of overspending:

a)     It saves time

One thing you cannot separate when it comes to shopping on cash and using it for day to day expenditures (we are talking about the unnecessary ones here), is calculation. Firstly, it takes time to manage cash, and going cashless could reduce that to a great extent. Secondly, going cashless might restrict spending overall which results in less trips to the malls or spending time browsing different deals, offers etc.

b)     Encourages savings

Not using cash actually helps saving directly, the cash you won’t be using would be saved in your bank account. This technique of going cashless gradually inculcates the habit of saving which might have been absent in the presence of an overspending style. Not only would this have a healthy impact on your bank account but also would help in contingency planning and to have enough capital at the time of investment opportunities that may suddenly arise.

c)       A halt to impulse purchases

Emotional spending is what drives many of the buyers and that is exactly what is targeted by almost all of the advertising agencies; know the truth and save yourself from overspending. And if that piece of knowledge doesn’t work, going cashless comes as the knight in shining armor. The cashless option helps people curb the desire to make emotional decisions. This almost always leads to overspending, whether you think you desperately need a different piece of furniture only because you have none in ivory at home, or it is any of the bonds you haven’t researched about but seem important because of the advertisement.

Going cashless is one of the strategies, which greatly help in controlling overspending and encourages savings so to help control unnecessary spending and help a person grow in financial terms.

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How to Create Additional Space in Your House without Spending Money?

Do you have a credit card? Great! You can go to a nice furniture store and buy space-saving furniture to make additional space in the rooms. It is easy. However, creating some space in your home without spending money is certainly a tough decision. The latter one definitely represents the lifestyle of genius people. Here are a few things that you can do right now to make a difference.

Declutter Your House

The dusty shelf filled with books is attracting insects. It has also acquired lots of space in your house. Similarly, the pair of jeans and shirts, which do not fit you now, are making your closet messy. Clutter and unused items also attract insects like cockroaches and silverfish. Start by removing the clutter from your house. You will also find many reusable items in the house. You can take them to thrift stores and earn some money to spend it later on useful items. For example, you can sell the unused books and buy extra plates for the house. Keep them in the empty and clean bookshelf.

Evaluate the Space

Every room has eight corners and six walls (including the floor and roof). The objects placed on the walls help you make space on the floors. The objects placed on the floors acquire some space on the floor and some space from the wall.

Consider your room to be empty. Make its drawing on a paper. Now plan to re-organize your furniture in a way that it makes extra space in the room.

Do Major DIY Project

Sometimes, the clutter is not sold at a satisfactory price. Therefore, have a look on the items before selling them. See how you can transform the items into multi-functional objects. For example, you can convert discarded wooden crates into laundry baskets or bookshelves placed on the walls.

Shift Your Bedroom

Did you choose the biggest room in your house for making your bedroom? Most of the people spend their maximum time in the biggest rooms of the house. Therefore, you should always use the biggest room as a living room. Secondly, a bedroom should be used for sleeping purposes only. Many people complete their college assignments and office work in the bed. Some people watch movies and TV shows while lying in the bed, which is unhealthy. Shift your bed to the smallest room of the house. This will make your lifestyle healthier, and provide you extra space in the biggest room of your house.

Reorganize Your Closet

You can hang two shirts in one hanger, or stack three pairs of jeans in one hanger. Not everyone can afford a walk-in closet. However, you can make at least 20% extra space in your closet simply by re-organizing your goods. Add screws on the doors of closet to hang your jewellery. You may sell your jewellery stand in the thrift store. Similarly, put your shoes in paper bags instead of shoeboxes to save space.

Remember that a well-organized and spacious house is more liveable and attractive than a packed and tacky house.

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Should You Setup a Continuous Payment Authority (CPA)?

There are several financial instruments in the UK banking market that are designed to help customers deal with their financial problem better. One of the most relatively unknown ones among the lot is a Continuous Payment Authority better known as a CPA. A CPA can have a major impact on the state of your bank account and is therefore considered an important part of the UK banking industry.

Unfortunately, many customers know very little about it. This article takes a look at what Continuous Payment Authority is, how it works and whether you should set one up or not.

What is a Continuous Payment Authority?

A CPA is simple to understand. It is basically a type of automatic payment that can be made regularly. These can be set up using credit cards or debit cards. The authority is connected to the bank account that the credit or debit card belongs to. Typically business organizations, etc. make use of this payment method to make regular payments that are due each month. Unfortunately, for the general customer, CPA is similar to a direct debit or a standing order which can often mean they tend to confuse their rights.

How does it Work?

By setting up a CPA, the customer is allowing the business the charge its customers for their services using the credit/debit card information that they have provided. This means that business will not have to get each payment from the customer authorized; they can simply charge the customer for their set regular payments without asking. The most common uses of CPAs are to pay for:

  • Broadband and mobile services
  • Online Dating Apps
  • Retainer Fees for Lawyers
  • Gym Memberships
  • Magazine Subscriptions

A CPA is unlike a direct debit, because unlike the latter, the former can take payments any day.

Should You Set Up a CPA?

Having looked at what a CPA does, the question is whether or not a CPA is right for you. The first question to keep in your mind before taking this decision is whether or not you are availing services that could make use of a CPA?  If you are using a Broadband or have a gym membership, you are well within your right to set up a CPA. The second pressing question is do you think you can trust your service provider and the gym administration to not make false withdrawals in the name of payments? This is an important area of concern.

A CPA is allowing business a carte blanche to make any payments that they deem necessary at any time without the need for prior authorization. For genuine business this would only represent a chance to make regular timely payment withdrawals but for fraudsters it could mean a chance to con unsuspecting customers out of their cash.

Once you have decided on that part, you need to attend to the final and most pressing question. Does your account have a regular source of income that can allow CPA to properly function? If the account has money saved up and no new additions, with time it would be drained of cash.

These are some of things that customer need to make sure if they are to set up a CPA.

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Your Guide to Vehicle Finance

Most people are unclear about vehicle financing. Before you accept to borrow that auto loan, it is very important to have sufficient knowledge about how vehicle financing works. Although some aspects of various loans are completely similar, vehicle financing can be very different from other types of loans in some cases.

Depending on your financial standing, creditworthiness and other factors, you will get different types of repayment plans. Credit history is one of the strongest determining factors of whether or not you will get a reasonable vehicle loan. Apart from this, there are countless other things you should know and understand about vehicle financing. Some of the most important include:

Making Purchases on Cash

Ideally, you should pay cash in full to avoid any extra charges. If you can afford to purchase a car on cash, there is nothing like that. However, for most people, it is very difficult to pay an accumulated amount in one instalment. There are various financing options to fund your car purchase for them.

Get Funding from a Lender Directly

When it comes to getting a loan for your car, there are two major financing options. The first one is direct lending. This is the most common and easiest way to finance your automobile. You can get loan from bank, credit union or any other financial institution.

Depending on your credit score, you will find numerous options to choose from. In direct lending, there are many choices to compare and evaluate. Other than this, you can get a fixed interest rate, defined instalment method and other terms when going for direct lending.

Make an Estimate of How Much You Can Afford

This is one of the most important things to take in consideration. You should be clear about how much you can afford before going for auto loan. This will reduce the risk on investment substantially. Failure to repay in time can result in severe financial loss.

You can end up losing not your only car but also other possessions that were used as collateral. Hence, it is very important to be cautious and careful in these matters before making any decision.

You should also calculate interest rates, Annual Percentage Rate (APR) and make other required estimations before making a deal. Only go for the deal once you are sure about paying them back in time.

Avoid Low Down Payments

To get an inexpensive and cheaper loan, this is one of the most vital factors to know. Never go for low down payments. The less you pay initially, the more you will have to fund later. Each instalment combined with a high interest rate might get heavy on your budget.

In this situation, the ideal way is to pay as much as you can initially. A strong down payment will help in making your loan cost less in the long run by keeping interest rates low.

Also, before signing any deal, read everything properly. Never get involved in any financial contract before you are sure of all the conditions.

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Mortgage anyone?

With so many renting options and arguably, at this particular moment, renting being the favored options over buying a property… does it make sense to buy a house. We’re not in a position to advise you on whether you should buy a house or not, as this is beyond our remit. However, what we do know is that, in the long run, buying  a property is far more beneficial than renting one.

Firstly, and probably most importantly, you need to consider the capital investment and its growth. Buying a house really does make your money work for you. Houses typically grow in value over time. A typical 25 year purchase will see a house double in most areas and, in the capital other affluent areas, it may even triple. Two, you have control of the property, for better or worse. This means, you are free to improve it, adding further value. When renting, things are not so simple. Landlords are often averse to allowing tenants to make changes, largely due to insurance implications. Put simply, when renting, the house isn’t your own and you’re forced to live in a property that cant be changes… even if you could rent out your house adding an additional income steam, which is never bad, If you play your cards right… you could probably buy a number of houses to rent out… which over the long run is money in your pocket.

So buying a house… easy? Buying a house needn’t be a chore… but it’s not the simplest process. Most will have to apply for a mortgage, which means asking a lender for money. This means borrowing from a bank in the majority of cases. for some… this is going to be a pain as you probably already know that you’ve got bad credit. For other it will be less painful… but the whole transaction can take months… so go into your home purchase with your eyes open.

Help is at hand because there is a whole industry of advisers who will be able to help you select your perfect mortgage provider and mortgage product. They will help you choose an interest rate that works best for you and will help you through the application and approval phases. In addition, they will be able to provide you with access to other products like, life insurance, payment protection insurance, home insurance, contents insurance and more. Of course, we are also available to help… so please get in touch–we’d love to speak with you.

 

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