What do you mean by 100% Finance Home Loan?
A 100% Finance Home Loan is a mortgage loan that allows you to avoid the hassles of paying for a house down payment. In simple words, a 100% finance home loan is a no deposit mortgage loan.
Who should avail of 100% Finance home loans?
This loan is for anyone who cannot or doesn’t want to prepare the down payment for the home. The usual range for the down payment rate is from five to ten percent of the house value. This is perfect for people with no personal savings, for newly wed couples who are just getting started to build their family, and for people who have a sudden need for a new home.
What are the benefits of getting a 100% Finance Home Loan?
When you opt for a no deposit home loan, all you have to worry about is the amount that will be used for the fees in applying and securing the said loan. You won’t have to wait for months or years in order for you to save some money for the down payment. You can instantly live in your dream house.
Other than that, you can even get mortgage loans that will cover the cost of closing on the property, or those that provide you with extra cash for furnishing the house.
What do you mean by credit score?
A credit score refers to a three-digit number that reflects your credit worthiness. The score is based on your bill-paying history and your debt profile. This helps your lenders determine your credit behavior and your capability to pay the amount you have loaned.
By knowing your credit score, you will have a comprehensive understanding of your credit profile. Note that lending companies use the credit score in determining what interest rate and payment schemes they will offer you. Basically, you ought to have a very high credit score if you are planning to apply for a 100% Finance home loan.
How do you compute for a credit score?
There are specific mathematical models that are used to compute for a credit score. Among the factors that are considered when computing your credit score are your past and present payment behavior, your present debts, how long have you had such debts, the type of credits that are available for you, and the type of credit that you are currently using. The figures generated from these factors are compared with the other payment histories of other borrowers to get your position.
How does getting a 100% Finance Home Loan affect my Credit Score?
When one avails of a no deposit home loan, the borrower is at risk of getting a “negative equity” for the house that he has purchased. This happens if the price of the house that you have bought depreciates. As such, the lending company will ask the borrower for additional charges in order to make up for the current market value of the house.
In cases when the borrower cannot pay for the additional fees, the lender can also sell off the collateral or the securities of the borrower. As a result, the negative equity may lower the credit score of the borrower as well.
By: Robert Diarioti
Posts Tagged ‘Extra Cash’
FAQs – 100% Finance Home Loan and Your Credit Score
April 16th, 2010Evaluating a Finance Lender
February 1st, 2010
When most of us need some extra cash for an upcoming project, the first thing we think about is heading down to the local bank and getting a loan. While this may work just fine in some cases, you may not always get the best rate of interest or the most favorable repayment terms. In order to do that, you may have to investigate more than one finance lender. Here are some tips to help you properly evaluate potential lenders.
One of the first things you want to look at is stability. Banks usually have the upper hand on this one, since most of them have been around for many years and can demonstrate their stability simply by their ongoing presence in the area. Finance companies may not be able to demonstrate their stability in quite the same manner. If you are thinking of going with a finance company, do some digging into their background. You will want to know when the company started, at least some basic ideas of how they do business and also are they stable in their operations. You can get a lot of this information from the company itself, but you can also check with records available at the local court house to determine if this finance company is one you should consider doing business with.
Along with stability, you want to learn all you can about the reputation of the company. Ideally, you want one that has a number of happy customers. A good finance lender knows how to be honest with a client and will do everything they can to keep the customer happy, within the boundaries of the operating guidelines of the institution. If possible, talk with people who have done business with them before. Get their perceptions on such matters as how well they explained the terms of the loan, how easy it is to reach someone if a question came up, and also if the lenders were personable and still professional. All these factors come into play if you want to deal with a lender who will have your best interests at heart.
Finally, trust your own gut feeling. If your interview with a finance lender leaves something to be desired, then you may want to keep looking for another option. Not everyone is a perfect match, so it may just be that you would work better with someone else. Don’t allow yourself to be swayed into something that your instincts tell you is not the right deal for you. Consider your hunches as well as the data you can collect about the finance lender from other sources. In the long run, you will be much happier with your choice.
By: James Woodley
Types of Business Finance – Grant Finance
December 20th, 2009
Whether your business is small and new or large and established you will need adequate finance for the majority of projects, purchases and expansions you’re your business makes.
Obtaining the necessary cash to get your business off the ground can be a challenge and few new companies are able to finance themselves on cashflow alone and therefore need to consider gaining finance from other external sources. There are many of these external sources who will be willing to provide you with this start up finance, a few examples of these are stated below:
• Bank loans
• Business angels
• Venture capitalists
• Overdrafts
• Credit cards
• Friends and family
These are just a few examples of some of the places that business start-up finance is available from; however there is another source of business finance available that many people often seem to forget, this is grant finance. Business Grants can however take several months to process so you should always add extra time to your planning so that you get a decision on your grant application before the project is due to start.
A lot of start up companies and small businesses are often put off the idea of applying for a business grant to help them with their finances and because of this many of these businesses are missing out on a great opportunity to gain extra cash for there business; cash that doesn’t need to be paid back.
Few, if any new companies can finance themselves on cashflow alone and therefore need to consider raising finance from other external sources. If your business needs extra cashflow for a specific project or purpose then a business grant could be exactly what you need. This is because business grants are only awarded for specific aspects. So what exactly is a business grant? A business grant is when an organisation or authority gives a sum of money to your business to help you succeed in a particular project these business grants are mainly awarded by the Government at both a local and national level as well as by smaller bodies such as The Princes Trust or The Arts Council.
When you are applying for a business grant there are certain things that you should keep in mind such as a detailed description of the project, an explanation of the potential benefits of the project, a detailed work plan, details of your own experience and if possible a business plan. All of these will help you with your application process and help you to get closer to that business grant that you want.
If you are successful in your grant application the money that you receive is none repayable and you won’t have to pay any interest for it either; however you will need to carry out a significant amount of hard work if you want to stand a chance of obtaining a grant. These grants are also limited so the competition that you will face for them is intense.
By: Helen Cox
