A secured loan for a homeowner uses your property as collateral against the figure you borrow. In the old days this used to be called remortgaging. Effectively you either borrow a straight-up figure (if you own your house outright already) and commit to let the loan provider repossess your home if you default on the payments – or you basically let the loan provider take ownership of your mortgage, plus the new amount you have borrowed, if you have still got a mortgage left to pay.
In the second instance, your new repayment figure is the remaining amount on your mortgage plus the new loan figure plus total interest. Again, if you default on these payments then your house is repossessed by the loan provider and you become homeless.
That’s a pretty serious consequence for a pretty serious loan. As with all loans, then, you are bound by common sense to think long and hard before you adopt this course of action., The first thing you need to do is to go and speak with a non biased financial adviser. A non biased adviser is a person who works (normally pro bono) for a citizen’s advisory service, and who has no affiliation with any loan providers or financial institutions. They are the only people professionally qualified to give you advice that is in your best interests and not in the interests of the company giving you the money.
Be very clear that your situation warrants the step you are thinking about taking. A new car, for example, is not reason enough to remortgage your property. Nor is anything you want, rather than need. If you have a financial catastrophe and absolutely cannot get hold of an money in any other way then considering using your property as an asset is reasonable. But it should be an action of last resort – and a last resort whose alternatives have all been extremely thoroughly explored and exhausted first.
Selling your property, rather than remortgaging it, may be a much more sensible financial decision. You might not want to – but necessity is the master of want in any situation where your financial circumstances change to the point of considering refinancing your house, so this is an option you should clearly be looking at. Downsizing can free up capital that is yours, and doesn’t have to be paid back to a mortgage lender.
Be aware that benefits can help you too. Benefits are a resource that should be used before you consider doing anything so drastic as remortgaging your home. That’s why you pay taxes. If you live in a country where benefits don’t exist – again, go to an unbiased advisor before you make any large financial decision on your own.
The key thing here is to understand a reasonable definition of “financial needs”. Your financial needs are very, very different from your financial wants. Needs are this simple – food, warmth, clothing. If you have clothing, you don’t need more – you just want it. If you can eat, you don’t need more food – you want it.
Refinancing against your home is a huge undertaking that can, if you are in no position to sustain your loan, leave you without a place to live. That applies to your family too. So before you make any kind of decision that could sign your life away, be very clear that you are doing it from genuine need, and not just from a passing want.
About The Author:
The above article is written and composed be Britney Danila who is associated with many travel and finance communities as their freelance and staff writer. She writes articles in her free time which are related to my pay day advance , exotic vacation plans etc.
Read more...
A few days ago, I saw many koi fish in a restaurant’s pond. Koi are ornamental varieties of domesticated common carp (Cyprinus carpio) that are kept for decorative aims in outdoor koi ponds or water gardens. Koi varieties are differentiated by coloration, patterning, and scalation. Some of the main colors are white, black, red, yellow, blue, and cream.
