How to Break Out or Prepay Your Fixed Rate Home Loan Successfully

When you take out a fixed rate home loan with a lender/credit provider, you sign a fixed rate contract agreeing to lock in your fixed interest rate for a set period.

Are You Thinking of Breaking Out of Your Fixed Rate Home Loan?

Breaking out of your fixed interest rate home loan contract during the fixed interest period can be shockingly expensive. So if you decide to break out, switch or prepay your loan early, for any of the following reasons, you will be liable to your existing lender/credit provider for any loss they incur due to you breaking out of your fixed rate agreement:

>> You want to break out of your fixed rate home loan, because you have decided to sell the security property within the life of the loan

>> You decide to switch your fixed rate home loan to another lender/credit provider, in order to take advantage of lower interest rates

>> You decide to switch your fixed interest rate home loan to a cheaper variable rate home loan

>> You are able to prepay your fixed rate home loan early (either partially or in full), because you have come into a lump sum of money or inheritance, or

>> You want to make additional payments in excess of the accepted tolerance, because you may have received a pay rise

Will I be charged any Fees if I Break Out of My Fixed rate Contract?

There are two types of fees you will be responsible for if you break out or “prepay” loan early, and they are the amount you will owe the lender/credit provider if you decide to pay your fixed rate home loan before the term ends, such as:

>> An Early Repayment Adjustment (ERA) fee (this is the expensive fee), and

>> An Early Repayment fee (this fee is usually a couple of hundred dollars)

If you are still undecided if you should break out of your fixed rate contract, it is advisable that:

>> You firstly speak to your lender/credit provider and request a quote, which sets out the fees that will be charged if you decide to break out or “prepay” your loan early

>> You refer to the terms and conditions of your fixed rate contract to ascertain for yourself, what fees will be charged

When you have undertaken the above steps, you can then make a much better and informed decision as to whether you still wish to break out or “prepay” your loan early.

Do Break Out Fees Go By Any Other Names?

Break out fees go by different names depending on your lender/credit provider, such as:

>> Exit fees

>> Discharge fees

>> Break costs

>> Early termination fees, or

>> Early repayment fees

How Are Break Out and Prepayment Fees Calculated?

Lenders/credit providers can choose a number of different ways when calculating the break out or prepayment fees to be charged, for example the lenders/credit providers can choose any one of the following methods:

>> A simple set dollar amount

>> A percentage of the amount you have borrowed, or

>> Predetermined extra monthly repayments

Lenders/credit providers will calculate these fees by:

>> Comparing the interest rate that you locked your loan in at against the current market rate, and

>> The length of the time that is left on your loan is then compared to the initial amount that you borrowed

Example: The following example will best explain the concept of how the break out/prepayment fees are calculated. The illustration assumes that you have an existing loan on your security property and the loan details are:

Your current fixed interest rate loan amount is: $200,000

Your fixed interest rate is: 6%

Your fixed rate term is: 5 years

You have decide to sell the security property after 3 years and you want to pay off the full loan amount, and the interest rates have also dropped by 2%

From the example illustrated above the fee charged will be $800.00

Fee = $200,000 x 2 years x 2% (interest rate change) = $800.00

How Can A Finance Broker Help You?

When considering if you should break out or prepay your fixed rate home loan early, spend some time researching recent rate movements. More importantly, speak to a dedicated finance expert who can:

>> Assist you to compare the interest costs of a potential new loan, and

>> Guide you towards the right personal decision that best meets your needs and requirements

So, this is how you can break out or prepay your fixed rate home loan successfully.


Homeowner Loans Online – The Perfect Loan, Now With Online Ability

When availing a loan, the homeowners have unique advantages over other financiers. The homeowner finance therefore have become popular source of borrowing finance for host of purports. One can use these loans for home improvement works, buying a car, wedding, enjoying holiday tour or for consolidating the debts.

In availing the homeowner loan your main focus often is on lower rate of interest. However, you should also ensure that the loan is in your hands in the least time and the loan availing costs are down to the lower limit. The homeowner loans online is a way to ensure that you get all benefits of a perfect loan and get the loan within your required time and use them for the activities like buying a new car, going to holiday tour, planning a lavish wedding, debt consolidation or for home improvements.

The online homeowner loans implies that you are applying for the loan using the internet. Under this process, lenders display an online loan application on their web portal. The loan seekers are supposed to fill some key details like loan amount, its purpose, repaying duration, home address and so on. There are many advantages of such online loans for the loan applicants. The very first advantage of such loans is that the all online facility ensures that your application is processed fast which in turn results in fast approval. The second advantage of these loans is that the online homeowner loan comes at lower interest rate and if the applicant is having a good credit history, then it gets reduced too. Therefore, such online loans are cheaper.

The homeowner loans require the applicant to pledge home or a valuable asset as the security. If a person wants to borrow greater amount, which the loan is usually meant for, then better place your home as collateral with the loan provider. Generally, the loan amount depends on value of security. The financiers usually will approve an amount that is of certain percentage of the value of your home. But, your personal circumstances like credit history and repaying ability also can make differences.

Though there are many ways, one way to get the loan at cheaper rate is to search for the suitable financier on the internet. The benefit attached with this process is that the borrower can choose to repay the loan amount which suits to his ability of repayment. The loan seekers can repay the loan in five years to thirty years. Thus, if reducing monthly outgo towards the loan installments is of main concern then opt for larger durations.

The borrowers have the option of taking homeowner loans online from banks, financial companies or from various online loan providers. For getting this loan at lower rate of interest with fast approval, better go for the online lending services. In addition, also make sure to first take rate quotes of lenders so that the compare can be made to get a perfect lender.


Need An Unsecured Personal Loan for Your Business Or Personal Use?

Hi there, do you have a brilliant idea for a first time new business or maybe you would like to expand and grow your current business but lack sufficient backing for a loan? Perhaps you had wanted to consolidate some debts, do some home remodeling? Maybe you wanted to start creating or expand on your financial wealth or, well – you just wanted some funds for your personal needs? Yes, it can be very frustrating when you apply for a simple loan and get declined. Do you know why? Well, just because you did not meet the lender’s requirements that are in their guidelines. Stipulations you must meet if they are to give you a loan. Unfortunately, in today’s economic turmoil where there are so many uncertainties, everyone has gotten tight-fisted. Imagine the difficulties that someone with good credit has to go through, versus the person with less than perfect credit? What is the solution here?

We understand getting new business loans or a loan period can be very challenging. Well, just like everything else in life, there are always options and different solutions. One of the most difficult roadblocks to overcome can be finding the right loan for your small business or an unsecured loans that you can used for any purposes. We understand this and that is why you will find a variety of loan solutions that can help you get on track with a loan for your small business or for your own personal needs. You can now get unsecured loans at great rates. You won’t need to put up any collateral or refinance your home to get the funds you need. Personal loans for small business use are issued to you as an individual, and are dependent on your good credit.

You Can Use Your Loan for Almost Any Purpose.

  • Small Business Loans; whether it’s a personal loan for a new business, a small business or a larger more established one, we have unsecured personal loans at great rates.
  • Debt Consolidation Loans; while it’s true that you cannot borrow your way out of debt, consolidating all your high interest loans in one at a great rate will save you money and reduced your debt.
  • Home Improvement Loans; whether you want to remodel your kitchen, replace a roof, add another room or just to refurnish your home, we have the financing available to help.
  • Auto Or Motor Cycle Loans; whether you are looking to buy a new or used vehicle, it can often be very difficult to get the loan you want. We may have the loan solutions that can help you to buy your car, motorcycle or truck.
  • Unsecured Personal Loans; you’re free to use your personal loan in a wide variety of ways to enhance your life or business.

Being your own boss is not always easy. But this is a lending model that is solely base on people helping other people! These are regular people just like you. The difference is that they have the available funding that you need. Many of them understand the difficulties and struggles to find the necessary funds you need to get started on your financial endeavors. This is a community of private lenders who would like to empower your new start-up business or provide you with an unsecured personal loan to get you started. They are ready and willing to help you financially!