Capital Business Finance

If you’re ready to buy a new house, you’re going to need a Home Purchase lender. And finding one online is convenient and simple! However, there are a few things you should look out for to ensure that your lender has your interests–and not his–as his top priority.

Make sure your lender offers options

There are a lot of options other than the traditional 30-year fixed rate mortgage. Depending on your needs and personal situation, an Adjustable Rate Mortgage (ARM) or Interest-Only mortgage might be a better fit for you. Or, possibly, you may prefer a loan with a longer or shorter term. A good lender should be able to offer you a variety of options so you can find the one that best suits your needs. Be wary of any lender that tries to push one particular type of loan.

Get your “pre-approval” in writing

Some Home Purchase lenders will “pre-qualify” you–but that doesn’t mean you’re guaranteed to get the loan! In fact, in most cases, “pre-qualification” means almost nothing at all. Choose a lender who will “pre-approve” your application instead, which is a more involved process. When you’ve been “pre-approved,” the loan officer has contacted your employer, bank, credit card companies, etc. Once you’re “pre-approved,” you’re a lot more likely to get the final approval on your loan.

“Lock in” the rate you’re quoted

Interest rates change almost daily–they can be down on Monday, and sky-high by Friday! And some lenders will quote you a super low rate to get your business, even though they know the rate may change by the time your loan is finalized. If a lender quotes you an interest rate, ask him/her to “lock it in” for 30, 60 or 90 days. Reputable online Home Purchase lenders will guarantee you your promised rate even if it takes another month or two until you close the loan.

Once you know your online Home Purchase lender is willing to offer you options, pre-approve your loan, and lock-in your rate, it’s time to compare rates, fees and other charges to make sure you’re getting the best deal.

As the name suggests, a secured loan is a loan given to the borrower on a condition that he provides the lender with something as a security to the loan amount. Generally, the security offered is the borrower’s home. The property pledged as the security is called collateral.

Secured loans are not risky for the lenders since they have something from which they can recover their loan amount, if the borrower fails to repay. For this reason, secured loans are offered at lower interest rates than the unsecured ones.

Secured loans are easier to get because of the collateral offered. The ability to offer collateral makes the secured loan accessible to a whole lot of persons. People who are otherwise unable to prove their creditworthiness can get a secured loan if they have something to offer as collateral for the loan.
Secured loans can be taken for a wide variety of purposes; in fact, any type of financial need can be fulfilled via a secured loan. Debt consolidation is one of the most popular reasons why people take a secured loan.

Depending on the value of collateral offered the loan amount can range from £3,000 to £50,000. The lenders are not hesitant to offer a higher amount. If they are satisfied that the collateral is of a sufficiently high value, they can even consider lending £100,000 or more.

The repayment options available with secured loans vary with lenders. Generally, they are based on agreement between the borrower and the lender. Repayment period might range between three years to twenty five years. A prepayment penalty may be charged if you repay the loan earlier than the agreed period.
The process of getting a secured loan has many costs associated with it. Since, collateral is under question, the lender has to satisfy himself whether the value of collateral is sufficiently high or not. If the collateral is your home then he might have to get your property valued and this will incur some valuation charges. Solicitor’s fees to prepare the legal agreement, the conveyance to the property site and office charges are also included in the cost of getting a secured loan.
The process of applying for

Secured Loans is quite easy. Nowadays, many lenders are having their own websites. A borrower can submit an online application for such a loan request. He can also submit his application over a phone or into any of their offices.

The process of getting approval for a secured loan is a little longer than the unsecured ones. The cause of the delay is the valuation of the property or collateral. The paperwork that has to be done in pledging the collateral also takes time. Lenders will also take the help of credit rating agencies to get a clear picture of your credit history. All these formalities will be completed within few weeks and you can hear about you loan within 30 days of applying.

Every lending institution has a legal obligation to inform you about the interest they will charge on your loan. The APR (Annual Percentage Rate) is the most suitable indicator of this factor. The APR charged from you will depend upon your creditworthiness and equity in the property. The borrower should try to get the loan with lowest APR since it will help him pay the loan easily.

Taking a loan is a legal process and brings financial liability to the borrower. While taking a loan, a credit agreement has to be signed; the terms and condition of which are binding on both the borrower and the lender. This fact itself should encourage the borrower to get into the minutest details of the loan agreement and get everything clear before signing on the dotted line.

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