Decide On The Right Loan For Your Old Property..

With there being a general economic crunch across the world, more and more people are struggling to keep their head above water. And when survival on your own power becomes a difficult thing to do, you're forced to turn to other avenues for money. One such avenue that an increasing number of people are turning towards is that of getting a loan. Usually, loans are given against collateral that the lender can use to either assure repayment of the money he has lent or that which he can sell in order to reclaim money which the borrower has defaulted on. When you're in a pinch, you can still apply for a loan and get some money that can help you stay afloat for a while longer. Here are some of the types of loans that can be availed for your old property regardless of the location, be it Penang properties, Kuala Lumpur properties or Johor properties.

First Mortgage Loan 

If your existing loan has a high interest rate or if you have an adjustable rate mortgage, you may want to replace your loan with a new loan to help lower your monthly payments and the amount that you will pay to the mortgage company. This is a good option if you are planning to stay in your home for longer than a few years, but if you are moving in a year or two, it may be cheaper in the long run to just stick with your existing mortgage loan. Make sure that you carefully read the loan terms and choose your loan to ensure that you are making the right long term financial decision for you and your family.

Second Mortgage Loan 

You can get a second mortgage based on the amount of equity that you have in your home to allow you to make improvements to your home or pay off high interest loans from credit card companies. This has several benefits, including the fact that you can take the interest from your loan off of your income taxes. A second mortgage loan is another loan in addition to your first mortgage, so you want to be sure that you can afford another additional payment, so that you can keep your financial situation secure.

Refinancing Home Loans

Refinancing is suitable for when you are having a hard time trying to keep up with your current home loan repayments. You can speak to a new mortgage advisor to talk about moving your home loan from one provider to another, or you can speak to your current home loan company to make a new loan repayment schedule. If you find yourself in a difficult financial situation then it is always best to talk to your current mortgage provider, as well as a few new ones, to figure out what your options are. Still struggle to understand what is home refinancing? Here’s a handy guide that can help you with that.

Home extension loan

At some point in life, everyone needs to upgrade their current home and make certain modifications, be it the addition of a new bedroom or extending the balcony. If you want to make any alterations to the existing structure of your home, you can avail home extension loan to fund the construction work. Before you apply for the loan, you first need to have a copy of permission letter from the concerned civic authorities sanctioning the structural modifications.

Home improvement loan

This type of loan is very similar to home extension loan, in the sense that you can avail funds under the scheme to carry out home improvement works like painting the exterior, undertake roof repair works, or refurbish the electrical and plumbing fittings in the home. Typically, this type of loan is availed by people who wish to increase the commercial value of their property so that they can demand a higher price for the same while selling it. Unlike the other types of home loans, this loan does not help an individual purchase or build their dream apartment. The loan however is designed to help individuals get the finance they require to make any changes or improvements to a house or apartment they currently own. It is important that you don't miss any payments with a secured loan. If you find you can't make a payment for some reason, contact the lender immediately to work out a solution. This is very important if you have lost your source of income. Most lenders will try to resolve the issue before reporting the personal loan as being in default. Since you have secured the loan with some type of property you own, you are at risk of losing that item if you can't repay the loan.

Home Reconstruction Loan

A home reconstruction loan was designed by the financial institutions for individuals who already own a house and wish to make a reconstruction. Many individuals tend to inherit property and wish to build their dream house on it. Some applicants spend most of their lives working in hopes to save enough to build that dream house. Instead, one can simply apply for this type of home loan which provides them immediately with the finances they require to do a home reconstruction without having to spend years saving up and in some cases, emptying their savings. Home loans are taken out by prospective home buyers to purchase a home and soon get you out of your renting property. It will help you purchase a home of your own and build up your home equity as soon as you start making repayments on it. Getting a loan requires having a good credit score as the lenders usually demand a highly creditworthy person who has no chances of defaulting on the loan. Loans are required by those who do not have the financial affordability to purchase something with their own money. The financial institutions help such people by legally financing their purchase and helping them realize their dream.

Top Up loans

Top-up loans are offered by financial institutions and banks, in addition by the lender depending upon the loan that exists with the borrower. To a higher or initial level, the existing loan you have can be topped up with the top-up loan. The rate is decided on the current loan basis, track for repayment as well as performance. On the loan that is running currently you should not have defaulted in any way. The track record of the borrower is checked by the lender, besides which it is understood that the income level of the borrower generally increases. This helps in increasing the eligibility of borrowing a top-up loan. Available with the lender is the borrower's existing history that makes the lending of top-up loan process easy.

By the right loan for your old property carefully, you will be able to find the right option for you and your future financial situation. By weighing the pros and cons of each type of loan, you can better ascertain which one will be best for your loan goals and future financial goals. Whether you choose a first or second mortgage loan, top up loan, renovation loan or home extension loan, you want to be sure that you make your decision carefully.

A pre-qualified loan approval will only be possible if you submit all the documents required by the lender, have a reliable and stable source of income as well as an excellent credit rating. Borrowers may be able to compare rates offered by different lenders. They may be in a position to calculate monthly instalments and time needed to repay the loan in advance by doing an extensive research.