Loans are undesirable, but unfortunately unavoidable nuisance in current circumstances. The always increasing cost of living and unreliable job situation makes it extremely difficult for masses to fulfill their daily needs without taking any type of credit. Loans are now required either you are purchasing your personal property in California or trying to get UAE company registration.
But these loans are neither easy to get nor simple to pay back. You must be able to present something in front of banks to show your eligibility for paying back your loans. In this situation, an important thing that proves profitable is the mortgage loan service in case of occupancy of property. In this type of loan, property of a person is taken as security for lending him/her loan by bank or any other financial institute.
If you are such a person having this freedom to get mortgage, then it relieves you from several nuisances that are part of most of other types of loans. This will assist you in accomplishing your required tasks with timely availability of capital without worrying for repayment issues for both parties.
Following are few important advantages related to mortgage that assist you in several ways.
Less interest & fee
With your property as security, the lender is least worried about repayment of your mortgage loan. It is because the lender is relying on property whose value is more than the actual amount of loan (mortgage is always less than the value of property). Therefore, they are ready to provide this credit with less interest and fee. Comparatively, there are higher rate of interest and fees for other loans due to less reliable security source. This will help you pay back your loan easily.
Apart from that, borrowers are more serious to pay back their loans in time because they want to protect their valuable property. It saves both borrowers and lenders from all types of legal issues and mental stress.
Another benefit available to borrowers of mortgage loan is the availability of high number of installments as compared to most of other loan types. This makes it easier for borrowers to pay back conveniently as it becomes less than your monthly income. This way, you can easily spend on your everyday requirement after paying your monthly installment.
Another very attractive benefit available for mortgage is that it assists the borrower in reducing income tax. In several countries, government provides the facility to exclude the amount of interest of mortgage from the tax you pay to the government. This is such a huge advantage that people are ready to take a second loan for a new property after paying their first debt.
Increase credit score
An important disadvantage with payback and few other types of loans is that they don’t increase your credit score even if you pay back your interest and loan in time. This is not the case with mortgage. In mortgage, the borrowers will surely get positive credit score after paying their installments in time. This type of loan also assists in applying for other different types of loans that need high credit score. They are easier to pay due to reasons mentioned above that makes you qualify for other types of credits.
Mona is a business consultant and content writer in Riz& Mona Consultancy, a Dubai-based advisoryfirm. She has more than 6 years of writing experience. She has vast experience in writing for number of business and investment related subjects.These including loans, credit cards, small business, real estate, trade, taxation and others.