A combo loan is a form of mortgage loan involving a combination of two loans against one asset, most commonly a house. The combo loan was created to eliminate the borrowers' need for private mortgage insurance when financing more than 80 percent of the home's value.Know More
Lenders require mortgage insurance to protect their investment on mortgages issued with little or no down payment. If the borrower defaults on the mortgage, the mortgage insurance company comes in to reimburse the lender. Mortgage insurance is not free, however, and the borrower must make monthly premium payments to the mortgage insurance company despite the fact that the insurance protects lenders and not homeowners.
A combo loan is a method for getting around mortgage insurance requirements. This is because combo loans divide a mortgage into two loans: one to pay the down payment and another, more typical mortgage. In this way, borrowers work around the 20 percent down payment requirement needed to forgo mortgage insurance. While this method can help homeowners obtain a loan without a down payment, it should be noted that this loan structure does not offer default risk that is less than that of a traditional mortgage with no down payment.Learn more about Personal Loans
In order to get a low-interest personal loan, applicants should research financial institutions that offer low-interest personal loans, compare loan offers and increase their credit rating as much as possible before applying. If the applicant is willing to put up his house, car or another type of collateral, he might be able to get a lower interest rate on a loan.Full Answer >
A debenture is type of a traditional loan, usually a long-term loan, that is borrowed by a company. There are usually different terms set out during the agreement including the interest, the loan amount, repayment terms, enforcement terms in case of a default and property provisions. Debentures differ from other ways of raising capital, such as bank loans, equity shares and bonds.Full Answer >
When a borrower misses a payday loan payment, the lender can charge a fee for the missed payment and make an attempt to collect the debt. The lender may cash the check it has on file, which could trigger the check to bounce at the debtor's bank, states Washington Law Help. Payday lenders may decide to send a defaulted account to a collections agency.Full Answer >
A direct-lender installment loan is one where repayment is required in a predetermined number of equal payments, and the borrower and lender deal together directly rather than through a third party, such as a mortgage broker. Mortgages that are not issued through a third party are examples of direct-lender installment loans. There is no middle-man, and equal payments are typically required on a monthly basis for 30 years.Full Answer >