A mortgage is a form of long term loan used to purchase property and was designed to help people afford to buy their own home over a long period of time. With most property costing several times a customer’s annual salary very few people can afford to buy their home with cash outright, and instead have to turn to a mortgage. A mortgage allows them to borrow the money they need to buy their home over a number of years, with loan terms of 25 and 30 years very common.

They’ll then make mortgage repayments every month, paying both interest and capital off their loan.

Different types of mortgage

There are several different types of mortgage, with the most common two being a repayment mortgage and an interest only mortgage. A repayment mortgage sees a customer make repayments of both the interest, and the loan, so at the end of the term they will own the property they have purchased.

An interest only mortgage sees the customer borrow the money they need to pay for their home, but only ever pay the interest, so at the end of the mortgage term they would have to pay back all of the money borrowed in the first place.
Interest only mortgages were popular when house prices were increasing rapidly, but make little sense in the current market.

Mortgage interest rates

There are several different types of mortgage interest agreement, with a fixed rate mortgage, tracker mortgage and an offset mortgage being the three most popular. A fixed rate mortgage is offered with an interest rate which stays the same, an offset mortgage only charges interest on the balance of the mortgage not offset by money in a savings account and a tracker mortgage charges interest at the Bank of England base rate, plus a fixed figure.

In a market where interest rates look like increasing fixed rate mortgages are the most popular, while in a market where interest rates look like falling, a tracker mortgage could be more popular.

Those who can afford to offset all, or the majority of their mortgage with savings will want to do so as they’ll pay no interest on the balance of the mortgage they have offset against their savings.

Customers must be at least £15,000 in debt to at least two different creditors to be able to apply for an IVA, and will contact an IVA company who will provide them with a debt advisor. The debt advisor will evaluate their level of debt and inform the customer of the likelihood of their creditors accepting the IVA.

The debt advisor will look at the customer’s outgoings against their income, and will decide how much they can realistically afford to repay each month, after taking into account all of their other spending. They’ll then take their case to court where the creditors will be asked if they would be happy to accept a payment of this size over a five year period. Anything not paid off after five years is wiped clear.

If 75% of creditors, by value of the money owed agree then the IVA is passed and all creditors have to abide by the plan, call of any bailiffs and CCJ action.

An IVA works as an alternative to bankruptcy and many creditors understand that a customer is heading for bankruptcy if they don’t accept the terms of the IVA, preferring to recoup at least some of their money rather than losing nearly all of it if the customer is declared bankrupt.

An IVA also allows a customer to keep their home, whereas bankruptcy will see the customer lose their home and need to find somewhere else to live. In such situations a judge will decide that a customer must also give up some of the equity in their home to their creditors, but will never suggest the customer is put in a position where they will lose their home.

Home loans, or mortgages come in a variety of different shapes and sizes, with the biggest difference being the way the interest charged is calculated. Nearly every sort of mortgage charges a customer interest for the money they have borrowed, and over the typical twenty five year period of a mortgage many customers will end up paying for their home twice over because of the amount of interest they pay.

The most common type of home loan taken out at the moment is a fixed rate mortgage, which sees a customer borrow money at a fixed interest rate for the initial period of the loan, which then switches to the banks standard variable rate at the end of the offer period. A fixed rate mortgage is usually offered over a two, three or five year period, and the interest rate a customer pays will stay the same regardless of what happens to interest rates in the country.

A tracker mortgage will track the Bank of England base rate, plus a percentage fixed at the beginning of the deal. Again offered over a two, three or five year period a tracker remortgage which tracked the base rate plus 3% might start at 3.5% when the base rate is just 0.5%, but could increase if the base rate increases, which will in turn increase the amount of money a customer has to repay every month.

A cash advance works in the same way as a payday loan, and is often called a payday loan. Customers who take out a cash advance borrow money until their next payday, when the repay the money they have borrowed plus interest. While the interest may look high on paper, in reality the cost of borrowing a relatively small amount of money over a short period of time is actually very low.

Many people turn to a cash advance to help them make payments that they would be unable to afford otherwise, and making the payments can help that customer to maintain their positive credit record, which makes borrowing in the future both easier and more affordable.

In 2011 over one million people in Britain turned to short term loans like a cash advance to help them make mortgage payments in difficult months, saving themselves from having a black mark on their records for the next five years.

There are a variety of different cash advance providers, but nearly all will offer online application forms which can be filled in very quickly. With online payments speeding up the process and no credit checks for most companies, many customers will have the money they want to borrow in their account in less than an hour from first logging onto the cash advance website to take out the loan.

A cash advance is a great way of spreading the cost of unexpected bills as a result of a boiler or car break down, large energy bills or even just bad budgeting during a month.

There are a number of different careers where a career development loan is very common, with lawyers and doctors often having to take them out to pay their way through the final years of their courses and to help fund the first few low paid years of work.

Career development loans are not just limited to those occupations, and anyone in any career is able to apply for a career development loan. The most important thing to remember when applying for a loan is that the lender is going to look at the risk of lending you the money, and you need to prove to them that your salary will increase enough for you to be able to pay back the money as a result of the development that will happen if they lend you the money.

Some careers will see obvious increases in salary for qualified staff, which is why career development loans are very popular in the medical and legal professions, but others may need to put together a case with examples of others who have taken on such training and have increased their salary as a result.
Career Development loans can be offered for any amount, depending on the length of the loan and the type of training carried out, and loans of £20,000 to £40,000 are not uncommon. Before taking out a career development loan it is worth looking into student loans, which are not always available but may come with a lower interest rate.

In truth, many car finance companies get away with charging more for their finance because people don’t shop around. They go into the car showroom, fall in love with a car and get talked into buying it by the salesman. Unable to afford the car upfront they are presented with the finance options over a number of years and just settle for what’s in front of them.

Unfortunately they are costing themselves money each and every month because they didn’t consider getting a loan to buy the car from an unsecured loan lender. With a huge range of banks, building societies and other financial institutions offering unsecured loans at hugely competitive rates customers can save themselves money on their car purchase by borrowing the money they need independently, and then using it to pay the car dealer for the car.

With a difference in interest rate of up to 5% in some cases between the cheapest unsecured loan and the finance offered in a car dealer ship, customers can save themselves up to £438 over a three year period on a £5,000 loan, and on a £10,000 loan that figure doubles.

Shopping around helps you save money with all sorts of finance products, and getting an unsecured loan to help finance your car is a great way of saving money you don’t need to spend.

They also start to feel stale, making us crave a move away, as we’ve got bored of living in the same surroundings, unable to afford to make changes.

One of the best ways to give your home a total makeover, and to make it feel like a new home is to redecorate. In the grand scheme of the cost of rebuilding your home, the decorating is actually very cheap, especially if you do the majority of the work yourself, and you’ll find that the cost of repainting rooms in your home is a lot less than you may previously have imagined.

You can take out a small unsecured loan now to give yourself the cash injection you need to buy all of your decorating materials, and can make a huge difference to the look of your home. You’ll be able to pay back the cost in small monthly payments over the next two years, but will have a fresh looking home, no longer tired, and will add value should you choose to move at the same time.

Even if you pay a decorator to come in and do the work, you’ll still not spend a lot of money and you’ll be able to sit back and enjoy watching the transformation, as a professional changes the look and feel of your house while you watch.

By borrowing money against the equity you already own in your home, through a secured loan, you can extend and add value to your home, replacing the equity you have borrowed and giving you a lot more space in your home to grow into.

It’s understandable that families grow, and while two under fives can easily share a bedroom, two teenagers may find it more of a struggle, especially as they will get physically bigger, as will their clothes, shoes and most other things they own.

By borrowing money to extend your home, you can extend, adding an extra bedroom, converting your loft, or adding a conservatory to give the family some extra places to spend time in the evenings and weekends.

Many people find that the money they spend on an extension, or loft conversion goes straight into the value of the house, so if you spend £20,000 extending your home, the chances are your home’s value will increase by £20,000, if not more.

The extra money you’ll be paying to repay the secured loan will be the equivalent extra money you would pay if you were to move to a more expensive and bigger home anyway, and the added value of your home will make moving house to a more expensive home more achievable in the future, as you’ll get more money back when you sell your own home.

In a stagnant market, borrowing money to extend makes a lot of sense as you can increase your equity, and the amount of space your family has to grow into in the mean time.

It’s not just the retail world which is seeing a huge difference since the internet became mainstream and the financial world has also changed. With a range of comparison sites for nearly every financial and insurance product offered in the UK, we can now compare the price of almost anything with just a few clicks.

Whilst car insurance was the first financial product to really start to see the impact of the online comparison site, now nearly every form of insurance, credit card and loan is also starting to feature, and shopping around online can really save a customer money.

Shopping around online for the best loan interest rates can save customers thousands of pounds in the long term, and by being able to compare the rates of many different providers in one place, also saves that same customer an also lot of time.

A customer borrowing £20,000 may not think that a 1% difference in interest rate sounds a lot, especially when the difference is just £ 9 a month over 5 years, but in reality the difference is £540 over the term of the loan, not money to be laughed at. With a 2% difference doubling that figure, suddenly the benefits of shopping around online when taking out a loan become very apparent.

You can shop around for all types of loan, including secured loans, unsecured loans and payday loans here and save both time and money.

With Disneyland in Florida one of the most popular destinations, many parents are putting off the idea until next year each year as they simply don’t have the money to pay for the holiday at that moment.

Unfortunately, this is meaning many children are missing out on going to visit another culture, and having the time of their lives, during years they’ll never get back.

You can go on your dream trip though, with a small unsecured loan. By taking out a loan to fund the trip you can make sure you children get the dream trip they deserve now, when they’re at an age when they’ll appreciate it the most.

It also means you’ll get some quality time with your children at their very happiest. You can then repay the cost of the trip on a monthly basis over the next couple of years, almost in the same way you might pay off a sofa or a new kitchen in the years after you’ve had it.

The small payment will be a lot more manageable than trying to find the money this year, or next, or the year after, and will mean you’ve given your children a dream trip that they’ll truly remember for the rest of their lives.