Are you tired of the city life, all that stress and running from one place to another? You would probably make good use of some time off during the weekends in the country. Purchasing a country house is the dream of many. However, even when you have the means, there are many doubts that arise. Here are some essentials you need to consider when purchasing a country house so you can really enjoy your time off at your new home out of the city.
Among the many things you have to consider when purchasing a country house there are three essential topics that you should address first: the location of the property and the means of transportation, the purchase price you are willing to accept and the means of financing the purchase and last but no means least, the improvements you are willing to make to the property considered in terms of time and money.
Location of The Property And The Means Of Transportation
The property needs to be located away from the city but not so far away that you can lose the whole morning traveling to reach your country house and the whole afternoon getting back. Ideally, getting to your country house from the city and traveling back should not take you more than four or five hours. This is due to the fact that any emergency situation can rise and you need to get back to the city or vice versa and also because weekends are not that long and you could otherwise lose a whole day.
As regards to the means of transportation, alternative means should be available. Make sure there are also buses or trains nearby that can transport you to the city because cars can break down, or get stuck especially when out of the city. Moreover, when the whole family goes to the country house, there is often the need of a member to return while the others wish to remain in the property a bit longer and unless all of the members have a vehicle (which is highly unlikely) the availability of other means of transportation is essential.
Purchase Price and Means For Financing
Decide a range of prices that you are comfortable with prior to start looking for properties. This is essential because you do not want to waste your time visiting properties out of your reach or places that do not meet your needs. In order to decide a figure you need to consider how much money you have saved and how much money you can obtain through financial sources. That way, if the price of a property you like exceeds by certain amount your budget, you will know how much you can extend by financing.
Home Improvements And Its Costs
Almost every country house needs improvements when purchased. You need also budget how much you are willing to spend on improving the property and how much time will it take. As regards to financing you can always resort to a home improvement loan so you take advantage of the equity on the property but the time is an important variable because you are purchasing the property to use it. Thus, give a good thought to this issue prior to purchasing.
Usually, when purchasing home appliances people resort to credit cards because it is the most comfortable source of financing and is always in hand. However, due to the high prices of some domestic devices, resorting to cheaper sources of funds like personal loans is not a bad idea and can save you a lot of money.
Personal loans beat credit cards not only on the interest rate and thus the cost of the money borrowed, but also on the consequences that such high amount purchases have and may go unnoticed. How your credit and financial situation is affected by such purchases should not be overlooked as it may turn out too onerous.
Interest Rate On Personal Loans And Credit Cards
The interest rate charged on credit cards can easily double the rate charged for personal loans. It is amazing how abusive the rates charged by credit cards and store cards can be and almost nobody notices it. Truth is that a credit card or store card can charge an interest rate as high as 20% or even more turning financing the purchase of home appliances into an extremely expensive burden.
As opposed to credit cards, personal loans provide inexpensive sources of funds. Even unsecured personal loans can provide interest rates as low as half the rate charged by credit cards. And secured personal loans (mainly those based on home equity) can provide rates even lower than those of unsecured loans, thus becoming the cheapest sources of funds along with home loans.
Moreover, even those borrowers with bad credit, no credit or a past bankruptcy can obtain finance through bad credit personal loans and the interest rates will still be lower than the rates charged for credit card financing. Thus, if you are planning to purchase goods of certain high value, you should always consider the possibility of requesting a personal loan in order to do so.
Credit Card Debt Accumulation And Debt Risks
Another problem that credit cards have compared to personal loans is that it is too easy to accumulate debt with credit cards. Since there is only a minimum payment on credit card balances, it is very common to feel tempted not to pay the balance in full and only pay the minimum which usually consists on interests only.
This leads to debt being accumulated through a vicious circle and can eventually result in default or even bankruptcy on the long run which will have serious implications on your credit score and history and can prevent you from obtaining finance in the future. Thus, it is advisable never to pay only the minimum payments on your credit cards.
Personal loans on the other hand, provide fixed monthly payments that can easily be budgeted so you will not have problems planning for repayment. The debt gets reduced every month and there is no risk of accumulation. That’s the reason why in terms of debt repayment, and the risks associated with debt accumulation, it is always better to finance through personal loans than with credit cards. Besides, the timely payments on your loan get recorded into your credit history as positive input and thus, your credit score improves every month.
It may sound strange, but it is possible to purchase a car by using the money obtained from a home equity loan and you may end up saving a lot of money in the long run by doing so. Home equity loans compared to car loans are inexpensive sources of finance and also, they are a lot easier to qualify for. Thus, if you have equity left on your home and you are planning on buying a car, keep on reading.
A home equity loan has no specific purpose and thus can be used for purchasing anything you want or need. In this case, you can use the money to buy a new or used car and by doing so, you’d be reducing the interest rate you will pay for the money borrowed. Though car loan and home equity loan are both secured loans, the loan conditions of home equity loans are more advantageous.
Benefits Of Equity
Equity can provide a lot of benefits when you need to borrow money. Home equity constitutes better collateral than a car and thus the financial transaction backed up with home equity implies less risks for the lender. Thus, you will be able to obtain better interest rates and better loan terms like higher loan amounts, longer repayment programs and lower monthly payments while saving money in terms of interests at the same time.
Also, equity as collateral has less possibilities of destruction or damage compared to a car. Thus, the costs on insurance will be significantly lower. Anything that reduces the risk in the financial transaction pushes the interest rate down because the rate is the way the lender compensates for the risk that lending money entails.
Moreover, for the same reasons expressed above (the risk reduction on the loan transaction) the requirements for approval will be lessened. When it comes to credit requirements, truth is that as opposed to car loans, if you have equity left on your home you can obtain financing even if you have extremely bad credit, no credit at all or a bankruptcy on your credit history.
Disadvantages Of Using Home Equity Loans
The main problem of using your home equity for purchasing a car, is that the means are way above the purpose. It is just like using a bazooka to kill an ant. Thus, if you ever need to resort to this form of financing for other purposes like making home improvements or consolidating debt, you may find difficulties because you have already obtained a home equity loan for purchasing a car.
The other problem, maybe the most serious one, is that since home equity loans use the equity that is left on your home as collateral for the loan, you are risking repossession of the property if you even fail to repay it. It works just like mortgage loans. In the event of defaulting on the loan, the lender has the legal right to seize the property and sell it in a public auction in order to claim the money lent. Thus, you should make sure that you will be able to afford the monthly payments.
