The Simple Guide to Loans

I want to talk to you today about loans.  A loan is an agreement between two (or more) parties to pay back a sum of money, usually with interest.   There are many types of loans.

Now, we are going to talk about mortgages.  If you don't have cash up front to buy a piece of property or a home, you can get a mortgage.  You agree to pay a sum of money to a lender and the property or home you are buying is your collateral.  You usually repay the loan in payments each month for a set number of years or months until the amount of the loan plus interest is paid in full.

You can get a mortgage from The Associates Home Loan of Florida If you have been in the military you may qualify for VA loan. That means that the United Sates Department of Veterans Affairs (VA) is backing the loan. Usually, a VA loan does not require the borrower to make a down payment. This is a wonderful option to have, as down payments can be costly. VA loans offer the borrower many more options to the buyer than most loans out there. If getting a VA loan is an option for you, then I suggest you take that route for your mortgage.

There are many types of mortgages. My experience is with a VA loan. Not having to make a down payment is one of many perks of having the VA back your loan. Most financial institutions that offer mortgage loans will also offer the choice for you to get a VA loan if you qualify.

Personal loans is another type of loan I have experienced. For me, I would go to the same bank I have a checking and/or savings account. You may need or want a personal loan to borrow money for a vacation, buy household appliances, a huge car repair bill, or many other reasons. Your bank will take your loan application and look at your credit score. They also look at past loans you have with them and if you paid them on time and in full. If your credit score isn't great and you have past loans with your bank, they are more likely to give you the loan because of this. It is also easier to get a loan if you agree to have the payments automatically deducted from your checking or savings account. Many banks will reduce the interest rate if you agree to this stipulation of the loan.

Another type of loan is a car loan.  It is basically exactly what the words say.  You are borrowing money to pay for a car.  The car is the collateral for the loan.   You may want to go through a dealership to get the loan, such as Ford Motor Credit.  If you have excellent credit, the dealership can offer you a much lower interest rate than most  Sometimes it is 0%. 

All loans look at your credit worthiness.  This is how you pay your loans or credit cards, that you make the payments on time and pay off the loans within the allotted time frames.  

My advice for ANY loan is to always read the paperwork before you sign anything.  You need to know the amount of the loan, the interest rate, and the monthly payments and the length of the loan.