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Posts Tagged ‘money’
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UK, which has been severely hit by the credit crunch, is now rising above the dark line of recession. The effect of recession was felt in all sectors that include employed and unemployed people as well. Many companies had initiated layoffs, job cuts, pay cuts, less spending culture, etc. to tackle the harmful effects of recession. This has led to a staggering increase in the rate of unemployment in UK. Many companies were filing for bankruptcy every day which severely affected the GDP of the nation. It is reported that 28000 financial services jobs disappeared in 2008, 200,000 predicted to lose their job in retail sectors in 2009 and 15000 British car workers jobs at a high risk. All these figures presented a sorry state of affair for safer lending in UK.
But nowadays, the market is booming again and trying to attain the back-to-normal position. BBC News has also quoted that UK employment market is recovering. The research conducted by various agencies depicted that the employment worm is slowing crippling towards the top which is a good sign to the UK Government. Moreover, UK government has been taking steady steps to tackle recession by lowering the interest rates of loans, fiscal stimulus of £20 billions of pounds to underwrite ‘toxic assets’, in an attempt to restore liquidity and get financial institutions start lending again. In addition, the UK government has also taken remedial steps for the unemployed, announcing £500 million of redundancy package and £2500 million ‘golden hellos’ for taking unemployed workers.
With the employment rate increasing, and the number of jobless citizens decreasing in the UK, it is much safer than before to lend loans to the borrowers. The research in the field of property markets has positive insights with the real estate agents thus, making sales much higher than before. All the above factors coupled with government initiatives of low interest loans make it easier for the customer to have access to mortgage loans.
The mortgage lending in UK is safer at present when compared to last year. Accordingly, UK mortgage lending is also rising significantly with 24% increase from June and the value increased to 27% which makes it to believe that mortgage lending is slowly getting back to the fore in UK business. Now, certain government initiatives and other economic factors are showing positive signals of good business future. Hence, it is more than just an assumption to say that it is safer to lend mortgage loans in the UK.
Tags: credit, crunch, lend, loans, money, uk
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All loans can be broadly classified into two main categories, Secured and unsecured loans.
1. SECURED LOANS – these loans are the ones which are ‘secured’ against an asset that one owns. In these loans you need to offer collateral against the loan like your house. Example if you secure a loan against your house and fail to pay back in time, the bank will foreclose your house and take its money back. Some examples of secured loans are mortgages, car loans, home equity loans, any recreational vehicle loans etc.
2. UNSECURED LOANS – these are the loans which need not be secured against any asset or where collateral arrangements do not exist. These loans are provided on the basis of ones credit status and ones ability to payback and many other factors. Some examples of unsecured loans are student loans, educational loans, personal loans, credit cards loan.
A secured loan is usually offered at a lower interest rate compared to unsecured loan.
3. Other than these, banks can lend money in different ways too, like line of credit, where you are subjected to a maximum allowable balance and can borrow from the line of credit up to the maximum, every month.
4. REVOLVING LOAN – a revolving loan is the one where you have an uninterrupted source of credit up to a predestined credit limit. You can repay all the credit at once or a part of it at the time of your choice. The interest is to be paid on the borrowed amount for the time it is borrowed. The repaid amount can also be re-borrowed in case it is needed. Hence a revolving loan is always available.
5. INSTALLMENT LOAN – loans with a fixed repayment schedule are called installment loans. The repayment time and amount is fixed before hand. The option to borrow the repaid amount is not available in case of the installment loans.
6. FIXED RATE LOAN – A fixed rate loan is the one where the rate of interest charged is fixed for the entire duration of the loan. These immunes a person from any fluctuations in the interest rates and hence is advantageous.
7. ADJUSTABLE RATE LOAN – an adjustable rate loan is the one in which the interest rates vary in line with the standard rate. This standard or benchmark rate is mostly the Prime rate which the US Treasury charges . Since the rates are in line with the market so in case the interest rates decline, so does your cost and vice-versa.
Each type of loan serves an explicit purpose depending upon your need and situation.
Tags: borrow, loan, money, types
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Every person is in dire need of money at some point of time in his life. At this juncture, even the wealthiest of men might not have enough money in hand. This is the point where mortgage comes into the picture. Mortgage is a term that actually refers to the transfer of interest or charge of a property or possession to another person as a security for the debt that they have to repay. So the person who lends the money is called the money lender and the person who borrows it is the borrower.
Mortgages are classified based on the legal aspects that each mortgage specifies. It can be either a legal mortgage or an equitable mortgage. A legal mortgage is made under the law jurisdictions of a particular country. This is classified into two more subdivisions namely the mortgage by demise and the mortgage by legal charge.
The mortgage by demise is being used for a very long time. It was the original form of mortgage in the early years and it is still being used. In this type of mortgage, in case the borrower is unable to repay the debt or the loan, the lender automatically becomes the owner of the mortgaged property. If the loan is redeemed, the lender should return the property back to its rightful owner. This type of mortgage is being used in several states in US.
The second type of mortgage which is known as the mortgage by legal charge, the borrower remains the legal owner but the lender gains sufficient rights over the property. These rights will enable the lender to enforce their security and gives them the right to take over the possession or sell it to another person. This is the most commonly used type in many countries like Scotland, Pakistan and many more. These mortgages are often recorded in a register as a proof for the lender.
An equitable mortgage is a mortgage that doesn’t come under any legal jurisdictions. The money was lent and the security was promised is the way in which this mortgage works. But this has not been accepted in several countries because it doesn’t follow the laws of the country. In this mortgage the lender takes the legal documents of the property and the borrower signs a memorandum as an assurance. Thus the mortgages come in handy when a person is in need of money.
Tags: law, lend, money, mortgage, term
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