The Top Ten (10) Terms And Conditions For Any Loan

Everyone should know that you should never sign on the final dotted line without fully reading and understanding the contract you are getting into.

This same terms and conditions applies to loans from any lending of financial company.
Signing a loan without knowing the terms and what everything means can be detrimental to your finances, credit and future investments and income.

Before you sign, make sure that you know these terms and how they will apply to you and your income. 

 
1.  Interest rate.  The interest rate is the percentage of your loan that is added on every month.  The percentage will vary according to the economy and will make a difference in your payments. 

 
2.  Fixed Rate.  A fixed rate will be an interest rate that stays at the same percentage throughout the entire period of your loan. 

 
3.  Variable Rate.  A variable rate will change according to the economy and the charts that are stating what the rates should be for interest.  A variable rate usually changes every year and adjusts according to a specific given range of percentages. 

 
4.  Principal.  The principal is what you will be paying on your actual house.  Whatever you pay on your principal is what you will see in the end as your investment. 

 
5.  Escrow.  This is similar to a savings account of your loan.  Whatever you put in escrow will accumulate without paying directly into the loan.

At the end of the term you can use it to finish paying off the loan or to invest in another loan. 

 
6.  Title.  A title will be what you get to your home after it is officially yours, stating that the property belongs to you. 

 
7.  Deed.  A deed will most often be used as a title for a commercial area.

 Instead of giving ownership it shows that the property is leased to the one who is using it as a business. 

 
8.  Home Equity.  This is a loan or line of credit that you can get for your home.
It will finance up to eight percent of your other loan and get paid back later.

This helps if you want to consolidate loans or invest more into the property. 

 
9.  Appraisal.  After an inspection of the home is made, an appraisal will be made.  This will be an estimated value of what the home is worth. 

 
10.  Equity.  This will be the actual amount of the property that you own.  Most likely, it is what is being paid off of your principal amount. 

 
Once you know some of these basic terms, you will be able to expand on your knowledge and find the exact loan that will fit your needs.

These basic definitions will help you in making the right decision for the type of loan that you want. 

The Ladder of Investment

Making an investment of any kind doesn't just mean handing over an extra set of hundred dollar bills.

With every large investment, there are specific rules and processes that are defined in order to ensure that your money will be going to the right place. 

If you are investing in real estate, you will want to know what initial investments will be. 

If you have found a home and are beginning a process for buying the home, you will begin to make some initial investments soon after the first contract is signed. 

Most real estate investments will require a down payment, which includes a set amount of money towards the person that is selling the home. 

This will then be put on your credit towards the investment that you are making. 

If you have extra money set aside, you will want to put it in the down payment, as this will make a difference in your investment later on and can help with final approvals for the loan that you are receiving. 

Another set of investments that you will be making is for any extra costs from the team that you have built. 

For example, a home inspection will usually cost a small amount of money. 

There may also be extra fees linked to the lenders paperwork and other things that are related to things such as the contract. 

Every person that is working with you will receive a commission or part of the investment that you are making in the beginning. 

Before you begin house hunting, make sure that you know about the initial investments and how it will affect your bank account.

Setting aside a specific amount of money for your first home, or knowing how much to include in a down payment after buying a second home will help you to make the right investments from the beginning. 

You will want to make sure that you walk into your dream home with enough money to get you completely in the door.