Tag archive for ‘finance’

Do You Need a Second Mortgage?

by Admin - on Dec 16th 2016 - Comments Off on Do You Need a Second Mortgage?

Mortgage in Lake OswegoThere are times when there is a need to seek a second mortgage on your house. For some, they seek a second mortgage to raise down payment for a brand new car or to help pay for a long-planned vacation. Though these reasons may be valid for others, the same may not hold true for you.

Nevertheless, Primary Residential Mortgage, Inc. noted that seeking a second mortgage might be an ideal option when you need extra cash to spend on worthwhile endeavors. What are these?

Education

There are homeowners who seek a second mortgage to help finance their or their children’s education. Although you can always apply for a scholarship grant, you must be aware that only a few get them. This does not mean you will not be able to get one, though. You can apply, but would you rather hinge your hope on such an application? What if you will not get it?

Your Other Option

If you want to go ahead with your scholarship application, would it not be prudent to visit a mortgage lender at the same time? According to HSH.com, this last option may be better for you as it allows you a fallback position. Put it this way: If your scholarship application is accepted, then all is well and good. There may be no need for you to seek a mortgage. If not, at least you have an alternative ready in form of a mortgage.

Business

This is perhaps one of the most common reasons homeowners seek a second mortgage. According to Clark.com, this may even be the least costly alternative to finance a business idea. Working in a company is fine, but with the volatile situation in the employment sector, it might be wise to establish a new income stream. In fact, this could be a good time to realize that business concept you had been thinking about for some time now. You can use the proceeds from the second mortgage as a starting capital for your business.

While you can always seek a second mortgage to buy that new car you have wanted for so long, it might not be the best of ideas. Remember, securing a second mortgage is a smart move if the purpose itself is worthwhile and could deliver you benefits at some later time. Seek a mortgage only for the right reasons.

Cash Management: Slightest Mistakes can Lead to Bankruptcy

by Admin - on Oct 15th 2016 - Comments Off on Cash Management: Slightest Mistakes can Lead to Bankruptcy

Capital optimizationAll business owners and operators have numerous obligations in terms of finances. From loans to mortgages, from salaries to assets, and from cash flow to overall profits, they have a lot on their hands. But just like all organizations, serious financial-related issues may arise, which can result in liabilities and may even ultimately lead to the bankruptcy of a company.

This is why proper cash management is a must for all businesses. With the help of a reputable and well-established provider of cash management services, you can rest easy knowing that all financial aspects of your business are well-taken care of.

Staying Financially Afloat

Through such services, you can remain financially afloat as the service provider will take full responsibility for all financial components of your business. These include revenue collection, investing your organization’s cash on profit-making ventures. They will also manage your company’s assets to ensure that they remain useful and profitable.

Cash Flow and Risk Management

Since cash management has everything to do with the management of a company’s liquidity and cash flow, it is extremely important for you to leave such matters in the hands of professionals. Always remember that when it comes to finances, there are so many risks and procedures involved, and even just the slightest mistake can already cause a major financial disaster.

Capital Optimization

Another way that a cash management company will help you with is through capital optimization. Through capital management optimization, they will develop a program that will allow your company to achieve its maximum potential in terms of cash flow and liquidity. Your chosen service provider will also discover and determine any potential financial disadvantage as well as help you improve areas that require so.

All in all, having such financial experts on your team will help you remain financially stable, grow and expand your company, and ultimately, have better revenues and profits.

Second Mortgages: The Essentials You Need to Know

by Admin - on Jul 5th 2016 - Comments Off on Second Mortgages: The Essentials You Need to Know

MortgageA second mortgage, also known as home equity line of credit (HELOC), is simply a second loan on your house. As with your existing mortgage, your home will secure your second mortgage. This means that your lender could legally take your home if you default on your mortgage. When this happens, your lender will sell your home to pay off your original loan and the remaining money from the sale (if applicable) will then go into your second mortgage.

Second Mortgage Basic Facts

Shantel Matagi and other lending institutions noted that many homeowners nowadays are considering second mortgages since the mortgage rate they’re being offered are lower, even if the property values are higher.

  • Second mortgages come in two primary types: home equity loan and home equity line of credit. With HEL, your lender will provide you money in a lump sum, which you’ll have to pay off in a predetermined time period at fixed intervals. The interest rate is usually fixed. An HELOC, on the other hand, functions like your handy credit card so you can spend cash whenever you need it. The interest rate is usually adjustable.
  • The amount you can borrow will depend on several factors — how much equity’s in your home, your loan to value (LTV) ratio, and your credit rating. Most lenders won’t lend you more than 75% or 85% of the LTV ratio of your combined first and second loans.
  • You can’t simply use funds from your second mortgage for anything. Plenty of homeowners use their second mortgage for huge expenses like repaying debts, purchasing another home, paying for college tuition, huge medical expenses, or home renovations. Essentially, you wouldn’t want to take out a second loan if you’re just planning on spending it on a grand vacation or other unnecessary expenses since you’ll be risking your house in the event that you default on your loan.

Many lenders offer second mortgages to qualified borrowers. With this in mind, you don’t necessarily have to take out a second mortgage from the same lender. The most vital thing to do is research your options, compare total fees and interest rates, and then decide which one will be best for your specific financial circumstances.

Separating your Business and Personal Finances

by Admin - on Jun 25th 2016 - Comments Off on Separating your Business and Personal Finances

Business PeopleAmong the most important aspects of operating your business is managing accurate records of the expenditures and income since this is the best way to monitor how your business is performing. Because of this, you must make sure that your business and personal finances remain separate, otherwise, complications could occur.

Practical Reasons to Separate your Business and Personal Finances

There are a couple of reasons why you should be proactive about keeping your personal and business finances separate, and a critical one is the potential tax complications. The Internal Revenue Service or IRS enables businesses to claim tax breaks of deductions for expenses that could be counted as business expenses like supplies and travel expenses. However, you submit proper documentation to prove that they’re indeed business expenses.

Note that if your business is audited, the auditors will closely examine every expense to validate if they’re associated with your business’ regular operations. In the event that you don’t have proper documentation to support your claim, you will have an extremely difficult time verifying your deductions.

Another vital reason for separating your finances is for debts and liability. If you have a limited liability company or business corporation, maintaining separate finances will benefit you especially in case a creditor comes to demand unpaid debts. Otherwise, if your personal and business finances are combined, creditors will have an easier time claiming your assets, regardless if they’re business or personal, as payment for your debts.

Lastly, consider your business credit. While you could probably obtain a credit card for your business using your personal credit score, you’ll require a clearly separate credit profile for you business if you want to apply for bigger loans, vendor lines of credit, or a business bank account in Bloomington, says a financial adviser.

Combining your personal and business finances could create headaches along the way, especially when tax season comes around. However, if for some reason you really need to combine your finances, make sure that you keep accurate documentation that clearly delineates expenses into a personal or business

Can’t Refinance Your Mortgage? Here’s Why

by Admin - on May 24th 2016 - Comments Off on Can’t Refinance Your Mortgage? Here’s Why

RefinanceLooking to refinance your home? Unfortunately, it’s up to lenders if you’ll be able to refinance or not.

Altius Mortgage Group enumerates crucial things that could deem you unqualified for a refinance.

Insufficient Equity

Plenty of homeowners took out option ARMs and interest-only mortgages way back in the housing boom since prices had nowhere to go but up. However, when the market became stable again, plenty of those homeowners ended with little to no equity. This inflated their LTV or loan-to-value ratio and made them unqualified for traditional refinancing.

Poor Credit Rating

Creditors normally consider a credit rating of around 620 poor. Couple a poor credit rating with a high LTV rating and you’ll have difficulty in find lenders who’ll risk giving you a refinance loan in today’s unstable market.

Massive Mortgage Amount

Jumbo loans are significantly more restrictive than conforming loans and come with increased interest rates. Lenders will scrutinize your application and your background more carefully if you’re asking for a large amount for refinancing.

Lack of Assets

The underwriter could deny your refinance application right off the bat if you can’t show seasoned and adequate assets. Financial experts recommend that you save money early and regularly by putting it in savings and checking accounts, bonds, stocks, and retirement funds, among others.

Inadequate Income

This is a major factor because if you don’t find yourself below the maximum DTI or debt-to-income ratio required by lenders, you won’t be able to secure a refinance loan.

Inconsistent Job History

If you don’t show absolute proof of consistent employment, normally for the last two years prior to refinancing, lenders could deny you even if you have sufficient assets or are presently earning lots of money.

These are only some of the things that could hinder your refinance goals. Contrary to what some homeowners think, you really have to be qualified to get any kind of loan. So if some or all of the above-mentioned scenarios apply to you, resolve your issues to increase your chances of securing a refinance loan.

Insufficient Funds for a 20% Down Payment? Go FHA-Loan Then

by Admin - on May 3rd 2016 - Comments Off on Insufficient Funds for a 20% Down Payment? Go FHA-Loan Then

FHA LoanThanks to the Department of Housing and Urban Development’s Federal Housing Administration (FHA), you can now obtain a home loan from a private lender much more easily. With the benefits that HUD FHA-backed loans offer, you should now consider making the transition from a tenant to a homeowner.

Why go HUD FHA instead of conventional?

The primary reason many home buyers in the country opt for loans backed by the FHA is because they can rest easy knowing that, in the event they default on their loan, the administration will take responsibility for repaying the lender. Bonneville Multifamily Capital points out because the government insures these loans, lenders are at less risk of losing money from defaulting borrowers.

The results? Lower loan interest rates as compared to conventional mortgages, which then give you a greater opportunity of home ownership.

The down payment advantage

Another advantage of securing an FHA-insured loan from the HUD is a smaller down payment requirement. Since you do not have to make the usual 20 percent down payment that most private lenders require, you will find it easier to buy a home and afford paying for your mortgage.

Satisfy the requirements set by the HUD for their FHA loans, and you would only need to come up with a minimal 3.5 percent down payment.

Less worries about closing costs

Most traditional lenders charge borrowers closing costs, further taking mortgage payments higher and making it even more difficult for home buyers to secure a loan. Although FHA loans still come with closing costs, they are far lower than traditional loans. Through an FHA-backed loan, your HUD multifamily lender may only charge you up to one percent of the amount you borrow.

You still need to meet certain requirements and qualifications when applying for an FHA loan, but these are far easier to satisfy and complete compared with conventional loans.

3 Things to Consider When Choosing a Mortgage

by Admin - on Apr 7th 2016 - Comments Off on 3 Things to Consider When Choosing a Mortgage
Mortgage Loans in Salt Lake CityFinally deciding that it’s time to buy that home you’ve always dreamt of can be thrilling. Purchasing a home is a huge investment and knowing what to expect can help you avoid falling into common pitfalls first-time buyers find themselves in. With a variety of mortgage products in the market, how do you decide which home loan to choose? 

Here are some guidelines that will make the process of choosing home loans in Salt Lake City much easier.

Types of Mortgages

There are mainly two types of mortgages: the government-insured loans and conventional loans. Government-backed loans can come in three forms: USDA loans which are backed by the Department of Agriculture, VA loans backed by the Department of Veterans Affairs, and FHA loans which are insured the Federal housing Administration.

Conventional loans are backed by a banking institution or a private company. These types of loans are available for various terms such as 15, 20 and up to 30 years. Furthermore, they require at least 5 percent down payment which can sometimes go up to 20 percent depending on your credit history and the type of lender you choose.

Government insured loans only require you to have a solid credit and a stable source of income. For example, FHA loans only require a 3.5 percent down payment and a credit score of at least 580.

Type of Interest Rate

There is a fixed and adjustable rate. Fixed rates never change and are perfect for people who are looking to repay their loan within 15-30 years and have a stable income. Nonetheless, it’s important to note that other fees such as homeowner’s association dues and annual property taxes may result in fluctuation.

Adjustable rates are those that reset after a certain time. At the start, they may be lower than fixed rate loans. However, after the initial terms end, your monthly payments increase annually based on a margin and on an index.

Size of the Loan

Classified as either conforming or non-conforming, the size of the loan is another issue to consider. Conforming loans are limited to $417,000 for single-family homes. For high-cost areas, the price may go up to $625,000. Non-conforming loans are riskier and come with a high down payment requirement.

Getting a home loan largely depends on your credit history, your income and future financial goals. Before applying for any loan, check to see if your credit score allows you to borrow. And if not, try to boost it. Talk to a mortgage broker to get the best rates.