Published: 2017-06-18   Views: 254
Author: hasanuzzaman
Published in: Mortgage
HELP I NEED MONEY FAST

The well-known American comedian and actor Bob Hope had the following satirical saying about a bank:

"A bank is a place that will lend you money if you can prove that you don't need it".

Comedian Bob Hope

Unfortunately, most of us do not have the luxury to make such statements nor to take such witty remarks too lightly, because the issue of getting your hands on funds, just to survive your day to day struggles, is a very serious matter. Only the very rich, those who don't need money are unaffected by the hassle to fund things which are necessary for your own survival and your dependents. This article will provide you with pointers on the best options available for you when the need to fund something, arises.  It will look specifically at the choice of a mortgage as opposed to other types of loans to reach the goals that you have set for yourself.

Different Types of Loans

The word mortgage comes from the original Latin word "mortuus" which literally means death.  The word was later adopted into previous versions of the French language as "mort", and joined with another French word from the same period namely "gage" which simply means undertaking or agreement. These words referred to the long-term nature of mortgages and ironically accepted the nexus between death and the duration of the agreement.  It was therefore accepted as an agreement which lasted until the death of the borrower. In the English language, the word "mortuus" is also reflected in words like mortal and mortuary.  Before we become too depressed about this type of loan let’s look at another amusing statement about the need of mortals to have access to money. Famous American writer Helen Gurley Brown released the following wisdom about this:

"Money, if it doesn't bring you happiness, will at least help you be miserable in comfort"

A mortgage is only available if you want to buy immovable property in short known a house, including an apartment or any other type of housing facility where you can be registered as the owner.  Business premises and factories can be bought in the same way.  A mortgage is, therefore, a loan provided to you by your bank or similar institution to buy that property you know will make your life so much more comfortable.  With the quicker pace of modern life and the fact that properties exchange owners far more often than in the past a mortgage is, by no means today, a liability that you accept until the day that you expire.  The loan is usually granted for a period of between 20 to 30 years, at the end of which all money due to the bank is expected to be paid.mortgage example

There are considerable variations in the terms and conditions available which leave ample scope for you and the bank to reach agreement on the term of the loan, the applicable interest rate and whether a deposit will have to be paid.  These factors are also influenced by prevailing economic conditions.  If you are in a position to add a deposit it will lessen the burden of your repayments and will be to your advantage.

Your installment is the amount that you pay to your bank to cover both the capital of your loan and the interest and costs thereon. Interest rates may be fixed for the period of the agreement or may be variable according to market-related rates. Both have advantages and disadvantages.  From the banks' point of view, a mortgage is the most secure loan that it can advance because the property attached to the loan can be appropriated if the borrower is unable to meet his liabilities.

Other types of loans stand in contrast to a mortgage. There are again several types. The one other loan agreement where a form of security is applicable is an agreement for the payment of a loan secured by the assets purchased with the loan. Elementary examples are the purchase of a vehicle or furniture. These assets only become the property of the borrower of the funds when the agreement underpinning the loan is paid in full.  Other types of credit which can be mentioned in this regard are personal loans, credit cards, and accounts at various businesses.  Most of them have variable interest rates and in some cases, security may have to be produced in order to get the loan advanced. 

Principal Differences Between Mortgage Loans and Other Loans

As a result of the considerable security attached to mortgage agreements, these loans are easier to obtain and more importantly, carries a lower rate of interest.  The only downside to this good news is that you must own immovable property or qualify to do so before a mortgage will be advanced to you. 

 

The other set of credit agreements may also involve the provision of security but in those instances, the security is of a lesser secure nature. No wonder then that in different ways the interest that you are obliged to pay on the loan varies at higher levels than mortgage agreements. The highest rate of interest is payable on credit cards and shopping cards, with personal loans at a slightly diminished one and agreements for the down payment of assets yet lower but still more than for a mortgage. 

 

Your Mortgage as a Starting Point, Always the Best Option

By using your existing mortgage as a source of funding you can save considerable money but there are conditions attached to this statement.  A mortgage is usually flexible in the sense that your bank will look at the extension or re-use of your mortgage amount if your payments justify this.  This will all depend on your credit profile, to which we will come shortly.  Hypothetically if you have paid a substantial amount of your mortgage capital, or have made additional payments to a sizable degree the bank will re-advance you all or a lesser amount of capital paid.

Consider the following options:

  • On every occasion that you pay additional funding on the capital of your mortgage, the outstanding balance gets reduced by a noticeable degree.The additional payment of your annual increase, your bonus or any other amounts which may come into your possession will not only reduce the capital owed, but also the interest that you are liable to pay.So, the payment of the capital at a faster rate will, without any doubt, save you considerably on the payment of interest.
  • A second scenario is that after paying off such increased installments you may be faced with the need to obtain further funding.You are now confronted with the choice to obtain a new loan agreement or to use the available funding in your mortgage to obtain the required credit. A new loan will carry more interest as we have indicated above while the use of your mortgage will allow you to obtain the credit at the same low level applicable to this type of agreement, as the security of your property remains in place.You may be able to save half of the interest that you would have paid on another type of loan when you follow this route.The only pre-condition which you should adhere to strictly to assist your own financial affairs, is that you pay the amounts borrowed in this way to buy for example a car, furniture or cover an emergency in the same time as an agreement for the payment of an asset or a personal loan in the case of an emergency. Otherwise, you extend the period for the repayment of the capital on these assets. The interest that such a step draws, may well turn out to be detrimental as it increases the payment of interest over a period of time tremendously.

Improving your Credit Ratings

Remember that your credit ratings play a deciding influence in the way you can manage your financial affairs.  Keep up with your payments, be open and honest with your bank and deal with situations where you find yourself in trouble. Your changes of steering through the maze of situations that may confront you then become more than just a dream.credit rating meter

Conclusion

When you are confronted with the need to obtain additional credit the question as to whether you should take a further advance on your existing mortgage or attempt to get a different form of credit, will have to considerer carefully. At first glance, it may appear that taking out a further advance on your existing mortgage would be the preferable selection. In some cases, depending on your personal circumstances this may not be true. Some knowledge of these instruments is indispensable for you to make an informed decision.  Speak to the representatives at your bank who will be able to assist you with guidance.

 

We conclude with a cynical remark by the famous British author and playwright Oscar Wild:

 

"Anyone who lives within their means suffers from a lack of imagination."

Author Bio

My name is Hasanuzzaman Sattar. I live in Kolkata, India’s second largest city, and a major tourist attraction. I am a 31-year-old Software Engineer with remarkable skill in all fields of Internet technology.

Where I come from

I come from a middle-class Indian family and was born on the 4th of March 1986 in one of the rural areas of the West Bengal state. My hometown is Baharampur situated in the central part of West Bengal. I am the only son in a family of three children, my two elder sisters are married and my father is a former high school teacher.

Even though I come from a humble background, I have always been an outstanding student. By the year 2003, I had completed my higher secondary education with exceptional grades in all the science subjects. By the year 2005, I was right and ready for the West Bengal University of Technology’s entrance exams. I was one of the top candidates to be selected for Engineering and went on to attain a bachelor’s degree in Engineering with Electronics and Communication. At the age of 23 years, in 2009, I was qualified and ready for professional work.

What I am Today

In December 2009, I joined the Hightech Lab Company as a junior software developer only to rise after a period of 3 months to the post of Project Manager! I’ve always been brilliant at generating various types of software and after a further working experience of 3 months, I decided it was time to take the jump. In May 2010, after having worked for just 6 months, I successfully launched my very own software company, ALSOFT.

Today, after 7 years, I can proudly say that I have proved my worth on the Internet. I am highly competent in computer programming, C, and C++ programming languages, Linux Operation System, Apache web server, MySQL database design and administration, PHP, Javascript, HTML and CSS. You name it, I know it!

Furthermore, I am an expert at planning disaster recovery for data centers; handling implementation and management procedures of huge databases. Web software development is my dream and I am up to facing all types of challenges relating to computer technology over the internet. I am the ideal person for dynamic website designing and development and have a vast experience in GUI software design.

Future Dreams

I am a highly ambitious programmer and my true goal is to enhance ALSOFT’s standing on the Internet as a top ranking online service provider like Google and Bing. On 21st August 2015, I launched this website: http://www.aldictionary.com. Its ranking info is on http://www.alexa.com/siteinfo/aldictionary.com. In just 2 years, this website has 5000 unique visitors from all over the world. I look forward to creating an efficient single platform for all internet users to educate or simply enjoy themselves. I am currently in the process of developing such services; a few have been launched and more are on the way.

Facing problems and challenges is something I enjoy doing. I’m not referring to just simple problems which may easily be solved by using the right formula or appropriate reference material but complicated problems. Complications requiring innovative solutions or brainstorming design requirements. I enjoy being pushed to the limits of trying to figure out what actually could be done with any particular material or method.

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