In recent years it seems that everyone has a mortgage, however, if you are renting instead of owning property you may not qualify for a mortgage. In that case you will need to borrow money from another source, such as a credit card.

Even if you are planning on buying a home soon, and will be renting, you should always be aware that you may fall out of the loan-to-value calculation, meaning that your mortgage will be too high. You will then be unable to borrow money from the Government.

You may therefore be able to borrow money from private lenders who have lower loan-to-value lending criteria.

There are no rules preventing you from borrowing from a bank or building society, but if you are borrowing from a private lender there are some things to be aware of.

They may charge you a higher rate of interest, or have a longer repayment term. With building societies you will be required to pay back your mortgage early. You will be charged up to four times more than if you were borrowing from the bank, and the rate charged is higher. They may not be able to service your loan.

The interest rate charged may differ depending on whether you borrow 250,000 or 1million. When you borrow more you will pay more for the money. If you do not repay your loan on time your lender may increase the rate you pay.

What is the risk of default?

Even if you do get your mortgage approved the lender will be out of money in the case of a default, meaning that they do not have the full amount owed to you, therefore you will fall out of the loan-to-value calculation. This will cost them dearly. In fact, the higher your loan-to-value, the more expensive your mortgage may become, and you will pay significantly more for your mortgage. Even so, with the exception of a small number of lenders, you will not be able to get a better deal, which is why you need to shop around for a mortgage. You could be able to get a better deal, but you will have to search around and fight your way through the maze of lenders.

If the lender are unable to lend to you due to there being too many bad credit borrowers, or they are charging a high rate of interest, you will find it difficult to get a loan.

When you look at the different types of mortgages, it may give you a headache to work through it and find the one that suits you best.

It is not all doom and gloom, there are a number of reasons why you should go for a personal loan so that you can deal with your problem of the crisis in our economy.

1. Debt consolidation. 

If you do not handle your debts well, they will get out of hand and cause major financial problems to you and your family. You do not want a bad credit rating which will affect your application for any kind of credit, or it will affect your ability to get a job. Therefore, if you are in financial difficulties you need to deal with your debts one by one and then ask the lender to consolidate your debts into one loan at lower interest.

2. Paying off your mortgage debt before you move. 

If you have a mortgage you will be able to make sure you do not miss any payments on the mortgage in the first year. This will help you to monitor how your finances are doing and allow you to avoid late payment charges or missed mortgage payments and it will also allow you to have less hassle with late payments. This will save you money in the long run.

3. Paying yourself first. 

If you pay yourself first, then you can easily save a portion of your income. This will help you to make sure you are using your income for your purchases.

4. Making sure your taxes do not go up. 

There are some special rules for interest deductions on a mortgage loan. These rules can help you to see how much of the interest you are paying on your mortgage is allowed. This will allow you to pay less tax and earn more interest on the mortgage loan.

5. Getting a lower rate. 

Although interest rates are low at the moment, there is always a chance that they could go higher again. If you do not have enough income to qualify for the lower rate, then you can still get a lower rate if you are planning to move before the mortgage term is up. By planning to move before the mortgage term is up, you will still be able to claim the lower rate you deserve for the remainder of the mortgage term.

6. Lower servicing charges. 

If you are planning to move before the mortgage term is up, then you can move with out any monthly service charges. This will also give you less hassle in the long run.


With these reasons, you should consider taking out a personal loan to deal with your debts. Your mortgage might not be the most convenient way to deal with your debts but it will still be the best way to save in the long run. If you do not manage your debts well, then you will find it hard to save.