Car Finance Explained – How To Get The Car You Need At The Right Price

There’s a common belief amongst some car buyers that you can only buy a car that you need if it falls within a certain budget that you can afford to pay out for and that there isn’t a great deal of room for negotiation.

Whilst this to a certain extent is true – if you’re budget is around the 20,000 pounds mark, there’s not much you can do to stretch your money to a 200,000 Aston Martin and likewise if a car is being sold second hand for 500 pounds, you’re going to have to be an amazing haggler to get it for 150 pounds – it isn’t a fixed rule that applies right across the board.

And in some instances, with just a little thought and research, you can turn this saying completely on its head and get the car you need to slide easily within your budget.

There are various ways to do this, but the easiest and most popular is to take advantage of a form of car finance.

Generally speaking, using car finance means that you can spread the cost of the car over a set number of months, meaning you don’t have to be able to pay for the car in full at the point of purchase.

Whilst you may believe that car finance isn’t a great way to buy a car – there’s a belief amongst residents of the UK that you need to own items outright straightaway, so you can say that they are actually yours – it’s obvious that this is a fading thought, as 80 percent of all cars currently bought are done so through some type of car finance deal.

What’s more, car finance doesn’t just relate to one type of finance deal and in fact refers to three separate ones, all of which offer slightly different ways to fund your next car purchase.

For example, the most popular of all finance options is car leasing. This is popular because you don’t own the car and are simply leasing it, you don’t need to pay for it outright over the course of the agreement and the monthly payments can be considered more of a fee to be driving around in the vehicle than anything else.

In second place there’s a Hire Purchase agreement. This form of finance is really what is known as a secured loan. Basically you typically pay a deposit (normally no less than 10%) and then you borrow the money to buy the entire car (say 20,000 pounds). If the finance company approves your application then the 20,000 has interest added to it for the term of your agreement (typically 5 years) and the total amount that you borrow is 20,000 + the APR (for our example let’s say an APR of 9% which makes it a total amount of 24,910 pounds which equates to 415 pounds per month. Importantly, you will not own the car until you have made the final repayment of 415 pounds + a small admin fee.

And whilst personal car loans are a third in terms of how popular they are, with around 13 percent of the market using them, car loans are an option to be considered if you want to own the car from the outset. However, they are typically more expensive per month than the other two alternatives.

You might have initially thought that car finance was a term for just spreading the cost of your car purchase over a certain number of months, but by taking the time to understand all three options, you can ensure that you can get the car you want at the price that you want to pay.

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Buying Real Estate – VA Homes & VA Financing

What Are VA Homes?

VA homes are owned by the VA, or Veteran’s Administration. The previous mortgage on these homes were insured by the VA, so when the mortgage loan is defaulted on, the VA gets the title to the property. They can then re-sell it to another buyer. The one thing that many people don’t know about VA properties is that anyone can buy them. You do not have to be military personnel or a veteran to purchase one of these houses as your own.

VA houses are offered for sale through an auction. A potential buyer must fill out the necessary forms and their real estate agent submits the forms to the VA before the auction period ends. If the house does not sell during the auction, then the house is simply offered for price that is usually close to the market value for the home, but is generally somewhat less than the market value. VA homes are sold “as is,” which means that you will be responsible for any repairs or upgrades to the home.

The Pros and Cons of VA Financing

There are two types of VA financing. To get regular VA financing, a person must demonstrate their eligibility. Eligibility for VA financing means that you have served in the military at some point or are the surviving spouse of a military person.

Or, if you intend to buy a VA home and are a non-veteran, you can apply for VA Vendee financing, which has terms similar to VA loans.

VA financing offers excellent terms for those that are eligible. However, there are some pros and cons to VA financing.

Some of the great things about VA financing include the fact that you generally only have to put down a $500 earnest money deposit. With other types of real estate, your earnest money deposit is usually a percentage of the cost of the home, so $500 can be a real bargain. Another advantage to VA financing is there is usually a low or even no down payment required.

Other advantages to VA loans are that the closing costs are usually lower, and there are no mortgage insurance premiums to be paid. The interest rate is negotiable, and it is always comparable to the federal interest rate.

Some of the disadvantages to VA loans are that you must pay a VA loan funding fee, which is currently 2.25% of the value of the home. However, you can choose to finance the cost of this fee into your mortgage loan. A buyer who wants to get VA financing must have acceptable credit. You cannot have lousy credit and get a VA loan. However, your credit does not have to be perfect, either. Buyers must also be able to show the VA that they can afford to make their mortgage payments and still have the funds for necessary living costs. Basically, you need to have an acceptable debt to income ratio.

Other considerations include the fact that you must intend to live in the home. You can’t buy it and then let someone else live in it. You must also maintain the home and keep it in good shape.

Talk To Your Real Estate Agent

It is helpful to find a real estate agent that has experience with VA loans if you are a veteran or with VA Vendee loans if you are not a veteran but want to buy a VA owned house and want to take advantage of VA financing. A good realtor will be able to help you fill out all the necessary paperwork and answer your questions regarding VA financing so that the process is not a stressful experience.

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