Ever thought about applying for mortgage and feel skeptical about it. Well its natural that your think twice before using your house or property as collateral for loan. There are various reasons why you should consider applying for mortgage and we’ll discuss some few reasons in this article. Just so we are sure you understand what mortgage loan is about, we’ll give a brief definition.
A mortgage is a type of loan in which property or real estate is used as collateral. This means that the borrower writes an agreement with a bank(or any financial institute). They lend him/her money for an agreed period of time at an agreed interest rate.
If the borrower is able to pay back the loan within the agreed date then he reclaims his/her properties else he forfeits them. Now that you understand what mortgage is about lets see why you might need one.
WHY CONSIDER APPLYING FOR MORTGAGE
Although it seem pretty scary losing your property but if played well and with the right motive mortgage can be very profitable. Below are some reasons why you should consider mortgage.
1. TO PAY OFF DEBT:
This is not usually a good reason to apply for mortgage but sometimes most persons have no choice. Applying for mortgage to pay off debt is risky as you might eventually lose your property. But if you have a steady source of income that you think is strong enough to pay off the loan within the agreed time then you should consider it.
2. BUSINESS ADVENTURE:
This is perhaps among the best reasons why you should apply for a mortgage. Reason because when you eventually start making returns from the business you could easily pay off the loan and secure your property. However, we advice that you be at the least 90% sure that the business will work out else you risk losing your property.
This is another good reason to apply for mortgage. When you eventually get the loan, you could invest and make more profits. The investment options can be offline or online. But be sure not to invest in scam or fraudulent websites or platforms.
4. TO RENDER HELP:
Sometimes most persons apply for mortgage not because they actually need the loan but because a friend or a family member does. While you might be helping a relative or a friend in need this is however the poorest reason to apply for a mortgage. Reason because if the loan is not paid back you will definitely lose your property.
Mntrends have put together simple loan calculators to help you better understand your loan. CLICK HERE to use the general loan calculator. If you would like to use Mntrends Auto loan calculator then CLICK HERE. For the Mortgage Loan calculator CLICK HERE to use the simple calculator.
Conclusively, apply for mortgage out of sentiment can be very dangerous. It is however reasonably beneficial if you apply for mortgage that is used for investment as this will yield a more profitable outcome in the long run.