www.thecashloans.com
Do you want to Live the Dream and Buy a Home for your Family?
The Market is IDEAL for Buyers Right Now!
But do you know how to get the Money to Finance your Dream Home? Welcome to Cash Loans, Where We Show you the Tricks that Mortgage Brokers Don't Want you to Know …
Have you wondered what's the difference amongst all the many loans that exist in the marketplace? Do you often get confused by the many different terms used? Do you know what the difference is between a mortgages loan and a cash loan? Have you been confused by the term 'sub-prime loan'? Do you know what the difference is between a mortgage company and a mortgage broker?
The point of this site is to give you the information you need to purchase your dream property. We will explore many of these terms, plus others in an attempt to clear up some of the confusion.
I Need Real Estate Loans …
These are loans obtained for acquiring property or real estate. Essentially these are divided into two main categories. A home mortgage loan covers houses, units and apartments while a commercial real estate loan covers offices, industrial property, resorts, hotels and other types of real estate that are not residential. Even if you wish to carry out a construction it will depend on the use of the property as to whether it will be classified as a commercial real estate loan or a residential real estate loan, unless you wish to construct a large block of flats. If you merely wish to construct a single house then it would be classed as a residential real estate loan whereas if you want to construct a whole block of flats it then comes under the category of commercial mortgage loans.
But I need a Loan to Buy a Commercial Property …
Generally commercial mortgage loans carry a higher mortgage rate than that of home mortgage loans. This is because they are perceived as being higher risk. Whilst home mortgage loans are usually taken out for 20 to 30 years a commercial loan could be anywhere between five to 30 years. You can even get short term cash loans for commercial purposes.
That sounds interesting! What are Cash Loans?
A cash loan could be for residential or commercial purposes. In most cases cash loans are those where you borrow funds without providing any real estate as security. At times the term 'personal loans' is interchangeable with cash loans. Because no security is provided with cash loans the amount the lender will let you have is considerably less. Generally you will be permitted to borrow between $5,000 to $30,000. Often cash loans are used for debt consolidation but can be used for other purposes, such as home improvements or, as mentioned above, commercial purposes.
What If I Need to Renovate my Property?
Generally you will not find a loan product with a lender called a home improvement loan. Usually if you need funds for home improvements you will look to obtain those funds by several different means. For example, you could use a redraw facility on your home loan if it is adequate for your needs. Alternatively, you could go back to your mortgage lender and ask them to raise the amount of your existing loan to cover your home improvements. You may have untapped equity in your home if you have occupied it for several years. In that case the bank will probably carry out a valuation and if they find there is increased equity they may be willing to advance you the extra funds. In this case the extra funds become your home improvement loan. However, if your bank is unwilling to advance extra funds for your home improvement loan requirements then you may need to refinance with another lending institution. In this case you could use a mortgage broker to source a lender that would be willing to advance the monies to you.
All of This Talk of Subprime Loans Has Really Got me Worried …
Generally the term 'subprime loans' is meant to imply that the interest rate is less than the prime rate or the going rate for a loan of that type. For example, if you apply for a home loan known as a 'full doc loan', and if you qualify then you would expect to get the going rate. If that rate is around 6% at the time you apply, then your interest rate should be very close to that. However, if you have a poor credit history then the bank will charge you a higher interest rate, perhaps two to five percent more. Alternatively, or as well, it may lower the total amount it is prepared to lend you. The higher interest rate means you have obtained a rate that is less than the 'prime' rate and these are known as subprime loans. In Australia subprime loans are usually called non-conforming loans.
Aren't Mortgage Lenders All Going Broke? Why Should I Trust Them?
Mortgage companies are the institutions that actually lend you the money. If you engage a broker then you may never have face-to-face contact with anyone from the mortgage lender. Mortgage companies can be banks, building societies or other second tier lenders of which there are many. On the other hand mortgage brokers are professionals who work on your behalf to obtain loans from the mortgage lenders.
Why do we have so many different types of mortgage lenders? There are several reasons for this, one being that they obtain their money from different sources. As an example, banks and building societies obtain deposits from customers whether they be your average mum and dad or a large corporation. They have other sources also, but that is usually the main source. Other second tier lenders obtain their funds largely from superannuation funds. These second tier lenders do not usually offer shop front facilities like the banks do. Most of their transactions are carried out through the internet.
Another reason we have so many lenders is that they service different requirements in the market place. For example, you have lenders that prefer to lend out on residential property while others are more favourable to commercial lending. Also, within each market you will find there is a wide variety of terms on which they are willing to lend.
What About Mortgage Brokers?
Do you know what the role of mortgage brokers is? Do you know who they work for when you engage them?
When you engage a mortgage broker, their role is to act on your behalf. Whilst you don't have to pay for their services in most cases, they are, nevertheless, engaged to represent you and your interests. Many are self-employed whilst others work for a mortgage broking company. In most cases they are not working for the mortgage lenders, although there are exceptions in the case of some of the banks. Some of the banks refer to their loan officers as mortgage brokers. In this case the mortgage broker works for the bank and not for you.
The task of a mortgage broker is to source the best loan for you from the various mortgage lenders on their books. They often advertise the fact that they use up to 30 or 50 lenders and so you can be sure they will find the very best deal for you amongst all these mortgage lenders. However, the reality is that most work very closely with just a few lenders. Usually this is because the terms offered by these mortgage lenders are very good and the broker has developed a good working relationship with them.
