Thursday, September 6, 2018

Considering a Loan?



Hi Neighbors!!

Today we are going to talk a little about loans. There are many reasons that people decide to get loans.  For instance, we had some credit card debt, as well as, one of my daughters needed braces.  I did not realize how expensive braces are these days! I mean they have always been somewhat expensive, but $4500-$6000?  Anyway, we ended up taking out a small mortgage on our home rather than a home equity loan.  We made this decision after some discussion with one of our sons, who is a loan officer.  He helped us to make educated choices when we were offered the two different types of loans.  Our loan has a set interest rate that will not change for the duration of the loan, and there are no penalties for paying off the loan early, as well as a few other benefits.  Remember that what worked for us may not be what will work for you.

Now, if you are anything like I am, you might be wondering, how many kinds of loans are there? I mean, you just go into your financial institution and get a loan, right?  I did a little research.  Just consider the type of loans available: conventional loans, conforming loans, non-conforming loans, secured loans, unsecured loans, open-ended loans, close-ended loans, personal loans, business loans, even payday loans. If you are self employed, there are self employed loans you can apply for even though you do not have pay stubs from week to week to show your income.  Which one is right for you?  These are all good questions and yes, you can receive a loan while self employed, you just have to have the proof of income and whatever else is needed by the institution you are getting the loan from.



You may want to get advice from friends or a financial advisor before you make your final decision.  I was so glad we were able to go to our son with questions.  Below are some question you will want to ask the loan officer, or at least know the answers to before signing the paperwork.
1. Is there a fixed term?
2. Is it a fixed interest rate, or does it vary or change?
3. Is there a pre-payment penalty?
4. Do they bundle insurance in with the loan?
5. What fee is charged on a home loan if they have to send someone out to do an estimate on the value of your home?
6. Are there any hidden fees?

Make sure all your questions are answered and you fully understand what they are describing before signing.  We actually had 48 hours in which to change our mind after signing the paperwork, just in case we decided to back out or go another route.  Our bank's loan officer was very helpful and answered all the questions we had.  I am sure we drove her crazy sometimes with questions, but never be afraid to ask those questions.  We are very happy with the way our loan worked out and are satisfied with the terms of our loan.  Now all our credit card debt is paid off, my daughter has her braces on and we are working towards paying extra on the loan to pay it off early. I hope that some of this information will help you make a knowledgeable decision.

Have a great day!  See you soon!







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