Are you looking for a way to pay your property off in a lump sum, and if so, then you should look into the Unitranche loan scheme. This is a scheme whereby you would take out a loan, which is not the traditional type of loan that you would get. Instead, it works more like a business loan where you would repay a certain amount every month. So instead of paying back your property in one lump sum as you would with a traditional loan, you would have to make monthly payments.
Of course, there are several advantages and disadvantages to this. One of the main advantages would be that you would be able to repay your debts much faster. It is usually a lot faster to repay debts than it would be to buy a property, and as a result you will be able to save money.
The costs involved in making these repayments
It will depend on how much you have to repay each month. The more money that you owe on your property then the more you will have to repay. In addition to the cost of the loan itself, there will also be a lot of other costs that will be incurred. These include insurance, taxes and a maintenance deal for your property.
There will also be a set term for when your loan ends. This is known as the term of your loan. If you want to repay your loan earlier than the end of your term then you would have to pay more interest. The lower your repayments would be, the less you would pay in interest. This will be good news if you have a large amount of debt, or an exceptionally high mortgage rate.
One of the main attractions of a unitranche loan facility is that you will be able to borrow more money than a typical homeowner would be able to borrow. This can be particularly useful when you have a particularly nice property that you would like to repay. However, the repayments would be much higher than if you were to get a conventional mortgage. On top of this, if you have a poor credit rating then you may have difficulty securing the loan that you need. This is because those lenders that offer the unitranche loan facility to cater for those with poor credit ratings.
It is also possible to borrow more than the property
As well as providing you with more money to repay your mortgage, it is also possible to borrow more than the property is worth. This means that you can borrow larger sums of money over a longer period of time. The repayments would go up to five years at a time, providing you with the capital to keep your property and pay off your mortgage out over that period of time. However, your monthly repayments would be much higher than they would be on a conventional loan.
Before taking out a unitranche loan you should be sure that you are in fact able to repay it. A good way to check whether you can afford the repayments would be to calculate the cost of borrowing against your current valuation of your property. If the figure you get is less than the amount that your unit is worth then it would be more difficult for you to find the money to repay your home loan. The value of the property will be reduced if you take on more mortgage than it is actually worth. In addition, if you increase your repayments beyond a certain level then you could be liable to come under the debt-to-income ratio requirement.
The unitranche loan facility is usually a short-term loan that is intended to only be repaid for a few months. In order to secure one of these types of loans, you will normally need to prove your ability to repay the loan in the short term. This means that your credit rating is important, or you may need to supply security such as a guarantor.