Thinking of getting a homeowner loan to help you with those needed bills? Many places would be more than glad to give you a loan, if you have good credit. But before you apply, here are some things that you need to know in order to save you some money.
Higher Rates Apply
Whatever your reason is for wanting that homeowner loan, you can be assured that it will probably have about a 1% or more higher interest than your first mortgage. This may make it a better choice to see first if you can rather finance your existing mortgage for a better rate of interest than you currently have.
Look At The Homeowner Loan Types
There are basically two types of a homeowner loan that you can get. These are:
• The Fixed Mortgage Rate
This is just like the name implies. It gives you the confidence of knowing what your payments will always be for the life of the loan - they are fixed. This loan is the surer way to go if you are looking just to make the payments for the life of the loan.
• The Adjustable Rate Mortgage (ARM)
This type of homeowner loan gives you an initial time frame (either 1,3,5 or 7 years) in which the rate stays the same. But after that, your payments will vary from year to year depending on the state of the economy - but that is unpredictable. It could become lower or higher. If you intend to pay off the loan during the fixed rate time portion of the loan, then this may be the option for you.
Borrowing Extra Money
While seeking to save as much money as possible in the getting of the right kind of homeowner loan, you also need to consider the option of debt consolidation - which is very popular today. Of course, this already could be the reason you are looking into it. Remember that some credit cards do carry a low rate of interest - possibly even lower than that of the homeowner loan. Therefore it would not pay to put the debt on such a card onto a higher interest loan. Remember too, that it may save you even more money if you are able to get a 0% APR credit card and do a balance transfer to that card - you cannot beat 0% interest!
Calculate The Timing Of The Loan
Homeowner loans are always determined partly by your current credit rating. This means that if you are near, but just below the excellent rating level, that it would save you considerably more money to wait a couple of months and seek to raise your credit level to where it needs to be to obtain the best rates. Just those few points of change in your credit rating could result in saving you literally $10,000, or more, if you can save as much as $34 per month, over a 30 year period.
While we often look at loans as being a way to get money quickly, these few suggestions should also help you to save money when you get that homeowner loan. As a person is actively doing their due diligence, you will become informed in the process, which will also enable you to keep more money in your pocket.
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About The Author
John Mussi is the founder of UK Bad Credit Loans4u who help homeowners find the best available loans via the http://www.uk-bad-credit-loans4u.com website.
