Credit issues due to broken neck in 2000. Stable now and have good income but trouble finding lending? Any help welcome.

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Most of us have done it at one time or another: lent money to a friend or family member. The loan is usually done in order to help a loved one meet a goal or to take care of a pressing need. We choose money lending because we want to help. Unfortunately, all too often extending a personal loan can lead to a negative situation. Here are a few points to consider when you are faced with the possibility of floating a personal loan to someone you care about.

The thing about money lending is that the recipient obviously does not have the resources at hand to effectively take care of the matter at hand. That is why you have been approached about the personal loan. It is important that you have an informed understanding about the ability of the recipient to be able to repay the loan within a reasonable amount of time. The repayment schedule should be discussed in detail and the terms of repayment should be perfectly clear to both parties. This is done so that the transaction can be done according to perimeters that both you and the recipient feel confident can be met in a timely manner.

While you may feel that asking for some sort of documentation of the loan and the agreement to repay is not appropriate to the circumstances, it is important to remember that you are making a financial transaction. The documents are meant to protect both the lender and the receiver. They should spell out in detail the amount that is being loaned, and the terms for repayment, including any late fees that may apply. If your loved one balks at this type of arrangement, you can take this as a warning sign that you should think long and hard before going through with the loan.

It is also important to consider your own circumstances before agreeing to money lending. Can you afford to make the loan without creating any financial problems for you and your family? Your first responsibility is to your own obligations, then using any surplus you may have to help those around you. Make sure that by extending a personal loan that you will not soon find yourself in need of a loan as well.

In conclusion, ask yourself one key question: if the personal loan cannot be repaid on time, or perhaps not at all, how will that affect the relationship? Money has been the downfall of many a marriage and friendship. If the relationship you share with the recipient is something that you want to preserve, than extending a personal loan must be something you do with the conviction that if the loan cannot be repaid that you will not allow that fact to create negative feelings toward that person. Just be very sure you can really follow through with that resolve before extending the loan.

Money Lending to help out a loved one is a generous gesture. Make sure your gesture does not lead to hard feelings should an unexpected obstacle come along.

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The seven deadly sins in home loan lending are no different from the seven deadly sins outlined in the Bible. The latter damns your soul; the former can decimate your finances. Whether you’re buying a house by yourself, with your partner, or with a friend, be sure to avoid the following costly mistakes.

1. Thou shalt get your priorities straight.
Unless you are earning the equivalent of three people’s wages, there’s no way you can pay off a house loan, car loan, and a student loan at the same time. In fact, if you’re living on the budget of the recently employed, you have no business setting your sights on that sprawling four-bedroom number in the city’s most exclusive neighborhood. Clearly, you cannot serve two masters at the same time. Before you go home loan lending, separate your needs from your wants. Sort your priorities, and decide whether it’s a house or a new car that you need.

2. Thou shalt not underestimate home loan lending costs.
In home loan lending, costs follow only one trajectory: upward. Downpayment and monthly payments are not the only costs you have to budget. You need to factor in insurance and “start-up” expenses, in the form of furniture purchases and getting the cable TV and the telephone turned on.

3. Thou shalt not get a mortgage without first window-shopping thoroughly.
Home loan lending experts point out the only way to make sure you get the best deal in the market is to see exactly what type of deals are in the market. So, shop around for as long and as often as humanly possible.

4. Thou shalt not sign contracts without reading the fine print.
Home loan lending is no joke. Whatever contract you sign is legally binding between you and your broker. Be sure to pore over the contract and ask questions about the terms you do not understand. A home loan lending contract, no matter how seemingly straightforward, is one document you should not peruse with glazed eyes and a wandering mind. Ask about suspicious-looking clauses. If it reeks of fish, it probably is fishy.

5. Thou shalt not be blinded by exotic-sounding offers and very long-term arrangements.
Many lenders and brokers will always try to foist huge houses on you. After all, the bigger and costlier the house they sell, the chunkier their commission. Be very wary of offers that sound too good to be true. In particular, know that grandfather loans will earn you very small house equity.

6. Thou shalt never go without home insurance.
Unless you can afford to replace everything you own in case of theft, fire, earthquake, or the end of the world, you need insurance. This can cost you whoopingly large sums, but it will be money well-spent.

7. Thou shalt not default on your payments.
In home loan lending, what has been given can be taken away. If you cannot keep up payments on your house, it could be foreclosed. If you ever find yourself having trouble with the payments, home loan lending experts advice calling your lender or broker immediately and explaining the problem. Chances are, you will be given a grace period or an alternative pay-off scheme.

Buying a house is a rite of passage akin to making the transition from Daddy’s little girl to full-fledged adult. To go through the rite successfully, take note of the seven deadly sins in home loan lending. There’s no point in getting a house in exchange for your financial soul.

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