Most average people borrow to buy fixed assets like homes or movable assets like a vehicle. Banks, independent brokers, private lending institutions and government lending agencies provide these people with the necessary finances to help them realize their dream of owing a home or a car. Some of the prominent types of loans that people take are:
• Auto loans
• Student loans
Each of these types of loans can be tailored to suit each and every borrower. Of these, a home loan is a popular loan that most people take to help them buy a home.
Some of the tailored made homeloans are:
• homeloans for single moms
• homeloans for those with bad credit
• homeloans for those purchasing a home for the first time
The recent economic recession has made getting a home-loan extremely difficult. Money has been scarce and lenders have become wary and rejecting most loan applications. With the slow improvement in the economy, lenders have started creating newer types of loans to help people. One of these is the ‘no credit check’ home loan that is similar to other home mortgages with one major difference. A credit check prior to loan approval is not needed.
When the applicant of a ‘no credit check’ home-loan submits an application, the lender will look for certain criteria before approving the loan. This could be the place where the person resides, his employment status and family background. Some lenders will delve further into the applicant’s employment record and get in touch with his or her employer and bank. Sometimes, the lender will also check how many dependents the applicant has, for the larger the family, the greater will be other debts and expenses. If the applicant has filed for bankruptcy, then his home loan application will be rejected.
By calling it a ‘no credit check’ home loan, the lender may approve the loan even if it is found that the applicant has defaulted on payments of previous loans like an auto loan. The bad credit history will not come in the way of the applicant receiving a home-loan provided the lender is satisfied he has the ability to make his home loan payments on time. Once the loan is approved, the applicant can purchase the property which will them be pledged to the lender until the entire loan has been repaid.
The house is given as collateral and is called the mortgage and this type of loan is referred to as a mortgage loan. The homeowner makes fixed monthly payments over a pre-fixed period. If he defaults in any of his payments, he will be fined. Continuous default can result in the house being repossessed by the lender. Using a mortgage calculator, you can easily calculate monthly payments using the following simple method:
Repayment / Interest amount = Principle x Rate of Interest x Period (in years) / 100
Timely repayment of loan amounts will help to improve the credit history of the borrower. With ‘no credit check’ home-loans, the rate of interest can be determined based on factors that are different from those homeloans that have been approved after a credit check. the rate of interest could be high in such cases. There are a few newer variants to the ‘no credit check’ home-loans that have been introduced in the lending market. One is the debt consolidation home loan that has a low interest rate but will have a longer repayment period.
Whatever the type of home loan you are applying for, using a mortgage calculator can make the calculation process much easier. With the intense competition among financial institutions, many try different methods to attract new customers. One is by offering free online mortgage calculators and guidance to potential borrowers. These calculators will ask for simple information like estimated loan amount, repayment period and interest rate and use this to calculate EMI amounts.
Having prior knowledge of financial commitment will help borrowers apply for the right amount of home-loan that they can easily afford to repay without defaulting. Using the mortgage calculators offered by different lending institutions means that people can easily find out the different rates offered and make a more informed choice. What is more, many mortgage calculators connect directly to the website of a lender. While you need not give any sensitive information, you can seek further clarifications on their home loan packages and get the best one to suit your needs.