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Investments

Are Houses the Best Type of Investments?
Dave
4 mins

There are lots of different ways to invest money, but houses do seem to be growing in popularity as a form of investment. There are reasons for this, but there are also risks with buying a home as an investment and it is good to be aware of all of the facts before you decide to take one on. This is written with regards to considering buying a second home as an investment, your first home would not officially be considered to be an investment.

Costs of House Owning

When you buy a house, you will find that there will always be costs that have to be paid. If you buy it with a mortgage then you will have to pay for the interest on this loan as well as any fees as well. If you buy it outright, then once you have paid the solicitor then you will not have those fees. However, there will be other costs that you will have to pay. It is very likely that you will want to have buildings insurance which will protect you and pay out if there is damage to the property. You will need to have this if you have a mortgage anyway as well as life insurance. You will also have to consider that there will be costs along the way as well, such as repairs that might not be covered by insurance, renovations and updates as well as decorating. There will also be additional costs such as council tax if you have no tenants in there. If you do have tenants then you will find that you will have to pay for safety checks and your insurance might be higher. You may also have to pay for it to be decorated more often with tenants in, perhaps between tenants. You may want to pay an agent to sort out the letting for you.

Return

If you have a second home, then you will be able to make money by renting it out. You could either do a long term rental and have tenants living in there or you might find that you will be better off using it for holiday lets. This is something which could bring in more money per tenant but it might be seasonal and so you could find that it will be empty some of the year. You will also need to clean between guests and you will need to wash sheets and towels if you provide those as well. These are costs that you will need to cover, which is why holiday rental is more expensive for guests.

Value

If you have a second home then there is a chance that it will increase in value over time. This means that you will not only gain money if you choose to rent it out, but also from that increase in value. However, there is a chance that it may go down in value as well as up. This is because house prices fluctuate all of the time and there could be times when houses are not in such high demand and prices go down. There could also be a case of the house being in an area where the prices have slumped for some reason, perhaps due to trends or something happening in the area. Therefore, it is a risk to assume that the price will rise, but like with all investments, you will find that the value will be more likely to rise if you keep your money invested for a long time. This means that you should be prepared to keep your money invested in the home for at least five years and it would be better to keep it for even longer if you can.

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Budgeting

Will Budgeting Help me to Pay off my Loan?
Dave
4 mins

If you have a loan and would like to repay it, then you may wonder what method might be best with regards to making sure that you repay it fast. There are different things that you can try but combining any method with budgeting can be extremely handy. This is because there are a number of advantages that will help you with repaying.

Can Highlight Where Money is Being Spent

When you first start planning your budget you will have to do an evaluation of what you are spending. This can be extremely useful as it will allow you to see what you are buying and how much you are spending on everything. You will find that there are probably things that you buy that are not essential that you might be able to cut back on. You may also perhaps find that you are spending more than necessary on some items and that will mean that you could buy cheaper ones and cut back there as well. Having a look at this information will allow you to be able to make a plan as to where you might change your spending habits so that you will have more money available to repay the loan.

Can Help You to Focus

If you are looking carefully at your spending, it will help you to more easily be able to focus on your goal. If you have decided how much you can afford to repay each month, then you can confidently make this payment and know that there will be enough money left to be able to pay for everything else that you need to buy as well. You will know that if you need or want extra things then you may have to tweak the budget and so rather than just spending, you will be able to plan it carefully and make sure that you will still be able to afford everything that you need and pay a chunk off the loan as well as buying the item that you want. If you keep your goal in mind it will mean that you will be able to make sure that the loan is repaid and you will also be able to pay for your essentials.

Can Keep You Repaying a Bit Each Month

A budget will allow you to be able to plan payments each month if you want to. You will know that you will be able to afford to pay them as long as you stick to that budget. This will allow you to keep making those monthly payments with confidence – knowing that you will still be able to afford what you need and keep repaying at the same time. You can even set up the payment by an automatic transfer each month, just after you are paid and then you will be sure that you will not forget or run out of money before you make that transfer.

So, as you can see, you will be able to use budgeting to help you in a lot of different ways so that you will be able to pay off your loans more easily. It will allow you to see where money is being spent so that you can make changes to allow for paying money off the loan. You will be able to use it as a way to help you to keep focused on your goal and it will ensure that you keep paying some money off each month. This is something that will mean that you will be able to repay the loan in full a lot sooner.

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Payday Loans

How to Pick the Best Payday Loans
Dave
4 mins

There are a lot of companies that offer payday loans and it can be difficult to know which ones to use when you have so many options available to you. The best thing to do is to think about where the payday lenders will differ in their approach and then consider what you will find the best. For example, they are likely to differ in their interest rate, fees, charges, customer service, ease of use and timescales and you will need to find out more about these, if they are things that matter to you.

Interest Rates

The interest rates are something that many people will look at when they are thinking about which lender to use. This happens with all types of borrowing. The interest rates may not be comparable though and it is important to understand this. Some rates ate the APR and this is the Annual Percentage Rate which is just the interest charged, whereas other rates are the AER which is the Annual Equivalent Rate and it will include the equivalent cost of any fees that are charged in addition to the interest.

Fees

Some lenders will charge fees as well as interest and some will not and so it is important to make sure that you check this out. The fees will be things like administration fees to cover the costs of setting up the loan and some lenders will charge them separately and others will have them included within their interest rate. This can make it difficult to compare lenders and so it is a good idea to find out how much it will cost you in real money rather than the interest rate and that will help you to be sure that you are making a proper comparison.

Charges

Lenders will also charge you for things as well, such as if you make a late repayment. It is good to find out how much these will cost you. You may think that you will not attract charges as you intend to repay on time, but it is worth finding out anyway. You could find that the cost will motivate you further to make sure that you do repay on time or it will allow you to compare different lenders that might otherwise be similar.

Customer Service

For some people, customer service is really important. They will want to make sure that the lender that they will use will be able to provide them with good customer service. It can be tricky to judge this, but you will be able to contact the customer service department before you take out a loan with them and this should enable you to judge what you think of them and whether you feel that they will suit your needs.

Ease of Use

It can be good to also think about how easy they will be to use. This will depend on how you like to deal with a lender. You might like to deal with them online, for example, or you may prefer to use the telephone or deal face to face. It is good to think about this and then investigate how you will be able to deal with the lender that you have in mind.

Timescales

It is important to also find out how quickly the lender can get the money to you that you need. You will find that they will vary and some may be able to get you money in a few hours, whereas others will take a bit longer. There will also be some companies that will be open overnight and at weekends which could be useful if you need money at that time. Therefore, if you need money quickly, then these factors could be important to you.

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