Category: Finance

Credit, Finance

How Does a Mortgage Loan Work?

A mortgage loan is always tied to financing a purchase of a property. This type of loan involves a large sum of money and the process may seem complex and overwhelming. It is important that we take a careful look on planning the loan before diving into getting one. It is also important that we consider the property that we are buying to support the loan that we will be taking for the purchase of the property. Like any other loan, having a well thought out plan will help you properly manage your debt despite its size.

  1. Getting the Loan

When a mortgage is applied for, you need to make sure that all documentation is in place. Since you are currently purchasing a property that comes from a borrowed money, the lender is granted a lien over the rights of the property. This means that any default made by the borrower will grant the lender the rights to take over the property and sell it to recover the unpaid balance of the loan including all interest fees and finance charges.

  1. Repaying the Loan

Related imageOnce the loan has been granted, repayment of the loan will be recognized on a specified period agreed by both the borrower and lender. Loan repayment becomes complex to understand as it involves the computation of the fees and corresponding interest rates. There are different types of interest rates that can be availed such as the fixed rate and variable rate. Never hesitate to ask if you find yourself in a place where you don’t understand how the fee was arrived. It is important that all fees and charges linked to the mortgage loan is thoroughly communicated to the borrower.

  1. Releasing the Property from Lien

Once your debt has been fully paid, the lender’s lien over the property is cancelled. The lender’s right over the property is now cancelled and can no act against the sale of the property.

Mortgages are complex as it involves terms and process that are usually not found on other types of loan. But with a little research, the knowledge of learning the process will greatly benefit your role as a borrower.

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Business, Finance, Invest

How Much Should I Borrow for a Business Loan?

It is typically a challenge for a business owner to identify how much they would need when it comes to applying for a business loan. A business is a great way to expand your business and support you through the company’s growth. But before getting a business loan, we may want to consider a few things before diving into the idea of getting extra cash and extra liability that comes with it. Here are a few questions that an entrepreneur needs to consider when it comes to getting a business loan.

  1. Do I have an established plan for the loan?Image result for business loan

It is very important to identify your goal on where you would use the cash acquired from the loan. A plan allows you to correctly identify and create a budget related to spending the loan acquired.

  1. Will the income generated by the loan cover the payments?

You should eventually start earning from loan ph. A loan needs to be paid and without generating additional income, the loan would start to become a burden as your liability would increase. It is essential that you are able to project the possible earnings brought about by the loan. This is to ensure that your loan will not become a burden to the operation of the business.

  1. What will my business be doing next year?

You also need to focus outside of your loan and identify what your business will be doing next year. It is important that you know where your business is going to allow you to identify your income and expenses. Knowing your future expenses, you will be able to make decisions if a loan will be necessary to be taken now which will form part of your payment next year.

  1. Do I need a loan now?

Most practical time to take a personal loan in Philippines is when you have an answer of “No” to this question. Taking on a loan when you are currently liquid and doing well may mean that you will be able to take on the responsibility of paying your debt. If you are short of funds and business is struggling, it is better to find a solution and have a loan at your back as a last resort.

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