Fixed Rate Mortgage Loans Advantages &Amp; Disadvantages

By mYCZNbxh On February 15th, 2018

Fixed Rate Mortgage Loans Advantages & Disadvantages

by

Kimberly AshThroughout the past few years, home loan interest rates have remained relatively low. As the 2016/2017 fiscal year wraps up, the Reserve Bank of Australia has decided to keep the official cash rate at a steady 1.50%. In recent months there have been a lot of speculations from economists that this trend may continue for some time and even into 2018. This however, has left many home buyers undecided on whether to fix their home loans or not with some banks having begun reducing their interest rates while others have stopped hiking the fixed rate home loans.What is a fixed rate home loan?A fixed rate mortgage loan (FRM), is a full mortgage loan where the interest rate remains the same throughout the repayment period, as opposed to the variable mortgage loan where the interest may vary and either go up or down during the loan term.Advantages of fixing your home loanThe main advantage of a fixed rate home loan is the certainty that comes with it. Opting for a fixed rate ensures you pay a certain amount for a set period of time. This not only helps a home buyer to plan his finances well into the future, but it also ensures ones budget is not disrupted by the market trends. A good option for individuals or families who are working with a certain budget with little room for changes.The rates have remained low for some time now, however if the RBA were to decide to raise the rates in the near future, having fixed your home loan will cushion you from paying higher interest rates while those with variable interest rates may be swept into paying a never ending debt.DisadvantagesShould the Reserve Bank of Australia decide to cut down the cash rate, you will not benefit from the falling interest rates. You may end up missing out on low repayments that those with variable rates enjoy. Depending on the lender you choose, you may be limited in other areas like having no ability to make additional repayments.Fixing your home loan can be a great option, however if you are unsure of what the future market holds, you may opt to split your home loan, fix only part of the loan and this way you can have the best of both worlds variable and fixed.While a fixed rate home loan has numerous advantages and disadvantages, when it’s time to compare home loans and make a decision on which way to go, your decision should factor in your financial goals and current situation.Kimberley Ash is an expert property adviser and professional in Australia. The author loves to share her experience on the topics like home loan interest rates, lowest fixed rate home loans, types of home loans, big lenders, how to get loans approved, etc. so that latest property and home loan updates can be made available for the buyers before making any deal.

Kimberley A is an expert property adviser and professional from North Sydney, Australia. The author loves to share her experience on the topics like home loans,

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5 year fixed rate home loans

, types of home loans, big lenders, how to get loans approved, etc. so that latest property and home loan updates can be made available for the buyers before making any deal.

Article Source:

eArticlesOnline.com

Facts About Payday Loans And Credit Score}

By mYCZNbxh On November 24th, 2017

Facts About Payday Loans And Credit Score

by

Devora Witts

Everybody knows that payday loans and cash advance loans are probably two of the few financial products that do not require credit verifications to qualify for them. Though credit has little to do with the qualification process of payday loans and cash advance loans, there are still interactions between these loan products and your credit score and history. It is very important to know them if you are interested in keeping a healthy financial life.

These interactions may have nothing to do with approval but have implications on the qualification process of other financial products like credit cards, personal loans and even secured loans like home mortgage loans or home equity loans. So, as you can see, it is important for you to know them because your future financial life can depend on the use you give to these loans and their relation with your credit score.

Positive Interaction For Raising Credit Score

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It may sound strange but even though payday loans are meant only for an emergency situation, they can be a great tool for recovering your credit if used properly. Since most of the lenders that provide this kind of loans report to all major credit bureaus, it is possible to obtain one of these loans that do not require credit checks and take advantage of the fact that the lenders report to credit bureaus to get positive inputs on your credit history.

Even though the approval of the loan will not have implications on your credit report because no credit checks are made, the timely repayment of the loan will be recorded into your credit history and thus, a positive entry will be added to your credit report. However, bear in mind that payday loans do not have long repayment programs and thus, a single or two entries will be reported during the repayment of a payday loan. Personal loans with longer repayment programs are far better for this purpose, however, you may need to request a few payday loans before you can get approved for a personal loan if your credit score is not that good.

Negative Effects On Credit Score

There are some reasons why payday loans can affect credit score negatively. The mere fact of getting a payday loan will not affect your credit score but if debt keeps accumulating it will affect your debt to income ratio which will, in turn, affect your credit negatively. Thus, you should avoid using payday loans as a common source of financing because that is the main reason why debt accumulates: people fail to raise the money to repay a loan and so, they take another loan to repay the previous one.

Also, payday loan lenders report to credit bureaus, as explained above, and if the timely repayment of the loan gets recorded into your credit report as a positive entry, the lack of payment, or late payment will also be recorded into your credit report but it will affect your credit score negatively. As you can see, just applying for a payday loan will not affect your credit but what you do with it and how you repay it can have either positive or negative effects. Thus, be careful.

Devora Witts is a certified loan consultant who instructs people regarding

Credit Debt Consolidation Loan

and

Small Unsecured Loans

. To get aid with your financial situation you can visit her at

badcreditloanservices.com

Article Source:

eArticlesOnline.com

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