Borrowing – Your Options Explained

When you approach a lender to ask for a loan, you can expect a certain formula. Mortgages are a particular type of loan – they usually involve larger amounts, are spread over a longer period, and are secured on your house. As is clear from looking at any of the financial pages at the weekend, there are thousands of different mortgages out there. However, you can use these general rules to get an idea of what to expect when you apply for one.

How much can I borrow?

Providing you have a regular salary and have been employed for a certain period of time – usually six months to a year – a lender is likely to offer from three and a half times your annual salary. This will be dependent on your providing a cash deposit – usually 5 or 10 percent of the total amount needed to buy your house. Certain professions, such as doctors, are sometimes offered more than this – up to five times their salary, but this depends on other factors too.

How much will my repayments be?

Again, this depends on many different factors. The interest rate will affect the amount you pay every month, as will the size of the deposit you can provide and how much you are borrowing. Some mortgages offer special rates for the first few years. In the current economic climate and as a very general rule, you can expect to pay between 0.5% and 0.75% of the total cost of your house every month. This means for a mortgage of £100,000 your repayments might be around £500 to £750 every month.

Can I change my mind?

While many mortgages have a ‘tie-in’ period, meaning that you are bound to keep your mortgage for a certain period, you will normally be able to change lenders or pay off your mortgage if you choose to. However, you may find you have to pay penalties. Generally speaking, it’s best to make sure you will be happy sticking with your mortgage for at least the next couple of years before you sign up.

When approaching a lender, be prepared to give them information about your finances and employment. They will usually want to see proof – for example, bank statements and wage slips to verify your income. They will also probably want to know about what financial commitments you already have, such as outstanding loans.

Business Banking Explained

No matter where you are within your business, just beginning or have been in business for many years, one thing remains the same; your business needs a banking institution that is solid and great for businesses. Within this article, we will look at some of the main items you should consider when looking for a bank account for your business. There are many things you should think about when opening a new bank account for your business, each one of them should work to benefit your company in all ways necessary.

For starters you should look at some of the basics, first consider what type of company you are, limited or sole trader. For a limited business, you will be required to obtain a business bank account, while a sole trader has the ability to use their personal bank accounts for any activity within their business. For those who insist or are required to have a business bank account, you should consider a institution that has a team in place specifically for businesses.

Consider any fee’s that are associated with the bank account for example, overdraft fees or transaction feeds. Also, consider if the bank offers a period of time that is fee free for new accounts, if they offer this it is wise to take advantage of this offer. You should also look at any incentive offers that the bank gives you, for example, charge cards, free statements, or credit cards. Always check the interest rates offered on these account and consider if the chosen bank has internet banking, this is important because it allows you to have up to the minute information regarding various aspects of your account. Businesses will benefit from internet banking because it allows you to do your banking at your convenience, which we know that many busy business owners frequently do not have the time to visit the bank.

When you have finally sorted out the proper banking institution for your business it is time to open your account. There are many things you will have to bring to the bank when you go, this documentation could include your business plan or other various details in regard to your business. Additionally, you will have to take along your incorporation certificate, any items necessary to prove your identity (Photo ID, utility bills, and perhaps your passport), and a list of those who are authorized to sign any company checks.