The majority of the adverse consequences of unemployment are related to financial hardship, which is a common outcome of being unemployed. When you’re unemployed, you might resort to taking out loans to cover your expenses, but repaying them becomes another financial burden. It’s a challenging situation that requires financial solutions.
Taking out another loan to pay off the first one isn’t a wise choice. To ensure timely payments and prevent damage to your credit, you need to plan carefully. Even a single missed payment can disrupt your life, making it a challenging situation to overcome.
It’s crucial to strategize and find ways to manage your debts and meet your repayment obligations. The following suggestions might be beneficial:
Prioritize Savings: Building a savings fund is like creating a safety net for your short- and long-term plans. Having savings ensures you’ll have funds available for unexpected expenses. If you’re struggling to make monthly payments, consider using your saved money wisely. However, when dipping into your savings, adhere to certain guidelines. Spending all your hard-earned savings on loan repayments isn’t advisable.
Home Loan Application: Applying for a home loan can be intimidating, especially if you’re a first-time homebuyer. The process involves a lot of paperwork and thorough preparation. However, it’s a worthwhile effort. This comprehensive guide aims to walk you through the process of securing financing for your home, making the home loan application less daunting.
Know Your Lender or Broker: There are two main approaches to applying for a home loan. First, you can deal directly with a lender or a home loan company. Second, you can engage a home loan broker who will assist you in exploring various lenders. Many homebuyers find it more convenient and cost-effective to work with a loan specialist without involving a third party. To find a competent and reliable broker, thorough research and obtaining referrals are essential. That’s why most people prefer the direct approach of dealing with a bank themselves. However, in certain situations, brokers can be very helpful. For instance, if your credit history isn’t favorable, an experienced broker might be particularly valuable in shopping around and negotiating the best deal.
Understand the True Rates: While the advertised interest rate often catches borrowers’ attention, it shouldn’t be the sole factor you rely on. The APR (Annual Percentage Rate) or “the real rate” is a better indicator, as it considers all costs and fees that will accrue over the life of your loan. Although the APR is a step up from the advertised rate, it’s still a quantitative tool. After comparing loans based on their APRs, you’ll need to assess their other features. Comprehensive research firms like Annex and Points Home Loans can provide valuable insights into mortgage loans, helping you narrow down your options more efficiently.
