by Kelley GecikTweet
Just over a year ago, my husband and I found ourselves in the position to buy a house. It was a long time coming, with several financial setbacks, moves, and other "life things" that just seemed to pile up on us and weighed us down. The house wasn't in some ritzy new subdivision or upgraded with the newest trends in counter tops and appliances. Actually, it was a hunk of junk. A house with mice, bright pink walls, leaking skylights, and rotting decks. It was a fixer-upper.
In reality is was what we could afford in an area with sky-high property taxes. After seeing the effects of the collapse of the housing market and thousands of people losing their homes, we wanted to make sure we had a mortgage we could afford even in lean times. That, coupled with my husband's undying dream of redoing a house and being able to put his own stamp on it, made our house the best choice for our family.
We've figured out since our closing date that fixer-uppers are great if you have a large mountain of cash set aside just for repairs. Let's just say we didn't. Although we've scraped together enough money here and there to fix some of the most important problems in the house, we see now that this journey is only just beginning. Personally, I'm not sure if there will ever be an end.
We need money. A lot of it. We've pondered lots of different options that will let us borrow what we need. It all just seems so overwhelming. It's one thing to waltz into a bank to get a loan because you are buying a house, a true investment. It's another thing to go in saying, "We need $40,000 because I really want the French Oak flooring and new windows." Suddenly, all those decorative touches you want feel...extra expensive, foolish, and well, you still want them though, right? I know I do.
Getting a bank loan? Sounds like a nightmare. First of all, they seem to want just about every document they can come up with, which means you have to go hunting around, gathering this huge stack of paperwork. Then they check your credit, which I know makes me nervous when they start poking around in my financial business like that. I don't find the rates to be very good either and frankly, I just don't care for how the bank does business. Bank loan? No thanks.
We've had much more success taking advantage of special offers from our credit cards for cash advances. We can take out cash for a small fee and 0% interest for over a year if we play our cards right. I like this option because most of the time I already have the credit card, have been pre-selected for the offer, and then I can control how much I pay back. I feel like it gives me some freedom, though the idea of racking up credit card debt makes me anxious, even if it's at a low rate. It feels like they get you somehow, even if they start off all friendly with a low rate. Make one little mistake, pay 2 days late and suddenly they turn on you, charging you a late fee and cranking up your APR to the default rate.
There was one loan type I had heard of, but didn't entirely understand: a car title loan. Do you own your car outright? If you do, this could be a great loan alternative for you. An auto title loan lets you borrow money based on the value of your car. At first I thought, "Well, that's great, but what do you do when you have to get to work or school or the grocery store and you don't have your car?" Then I found out that the lender doesn't actually take your car, but they just hold on to the paper title. You keep your car and drive it like you always would. That changes things, right?
In digging a little bit deeper, I also discovered some pretty interesting benefits that I've haven't seen anywhere else. They offer some pretty great rates, some as low as 3%, which I seriously doubt the bank could match. You can take as long as 42 months to pay your loan back and they don't charge you an early repayment fee like some places would. And, are you ready for this? Remember how I had a problem with the bank looking into my credit and financial information? Well, with a car title loan, they don't have to check your credit. At all. So if you don't have a credit history set up, you can borrow. If your credit history is a complete and utter mess, you can still borrow. You went through a bankruptcy? Well, I'm sorry that happened to you, but you can still borrow with auto title loans.
Go find a bank that will tell you all that. I'll wait. Just kidding, that would take forever.
So there's good news too for anyone struggling right now with their income. If you're unemployed and not bringing in a paycheck right now, you can still qualify. The only real requirements are that your car is paid off and you have to be 18 or older. We haven't taken advantage of this loan type because I still have a few more years to pay off my car. Doesn't it sound like a great opportunity though?
We've tried to play it smart when it comes to getting a house and a mortgage that we can afford, even if things were to get rough. It's just as important to us to get the smartest deal when it comes to borrowing money, no matter what it's for. I'm pretty sure you'd agree with me when I say I don't want to pay insanely high interest, or pay fees for common-sense things like "applying" or "paying money back early". If you're in a position where you need to borrow money, don't just look at a bank. There are lots of options out there for fair loans, you just have to make sure you do your homework.
By working with our lenders, you could end up saving up to 20% on your repayment, and eliminate the risk of being taken advantage of.
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