Money is essential for all businesses to start up, operate and expand. The Small Business Administration (SBA) states that while poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second. They go on to say that when looking for money, you must consider your company’s debt-to-equity ratio–the relation between dollars you’ve borrowed and dollars you’ve invested in your business. The more money owners have invested in their business, the easier it is to attract financing.Ideally, it’s best to start your business on money you have in savings or otherwise liquid. But, like most people, you probably don’t have that much money available and you’ll need a loan. About the only way a startup business can get a bank loan is through one of the loan programs offered by the SBA, a federal agency that doesn’t actually loan money directly, but rather guarantees the payback of a certain percentage to banks. Thus, you must prove your creditworthiness with the bank, which requires excellent credit. And, you must meet the complex SBA eligibility criteria.Home equity loans (second mortgages) are cost-effective ways of getting startup capital because they generally offer lower interest rates, the choice of a fixed mortgage rate or an adjustable rate mortgage (ARM) and shorter repayment terms and lower payments than other business loans. Unlike business loans, it is easy to qualify for a home equity loan, even if your credit is not perfect. Even if you already have a second mortgage, you may want to cash out on equity through mortgage refinancing because many times, the attractive rates and flexibility of second mortgages make more sense than to refinance your first mortgage, especially if your first mortgage rates are good.
The Government has taken notice of the economic problems that millions of homeowners across the country are facing and have enacted the $75 billion “Making Home Affordable” plan to assist these homeowners. This mortgage refinance or modification plan allows homeowners to obtain a 4% fixed rate mortgage, and save their home from foreclosure.Homeowners are losing their jobs, losing their income, facing huge debts, or are in bad mortgages and this Government backed plan will help them save hundreds of dollars every single month. This money would help ensure that the homeowner gets their financial problems in order, save money for the future, or pay off other high interest debts. Also, a lot of homeowners now are already in the foreclosure process. This plan would help a homeowner, who is facing foreclosure, a fast track refinance or modification and a greatly increased chance of saving their home.As many as 9 million homeowners will be able to take advantage of this plan. This is due to mortgage lenders and banks receiving cash incentives from the Government for every homeowner they approve for refinancing or modification under the guidelines of this plan. Both the Government and mortgage lenders know that foreclosures really benefit nobody when everything is said and done. Banks and lenders stand to benefit much more by working with the homeowner to get an mortgage payment which is actually affordable. To do this mortgage rates will be lowered to as low as 4% through refinance or modification, to help ensure homeowners can stay in their home, and help the foreclosure rate drop.Homeowners who have already taken advantage of this program from President Obama are reporting savings that average in the hundreds, every single month. Other homeowners who were already in the process of foreclosure were able to actually save their homes. The bottom line is that if you are a homeowner who is in a bad mortgage, having financial problems, or are facing foreclosure, Obamas “Making Home Affordable” plan will likely be able to assist you save your home.
If you are a homeowner carrying a home equity loan in addition to your mortgage, refinancing to one monthly payment could save you money. Consolidating these loans has the advantage of one lower monthly payment and you can even lock in a fixed interest rate. Here are several tips to help you refinance your primary mortgage and home equity loans without overpaying for the financing.Refinancing has many advantages for homeowners with multiple loans. Consolidating your primary mortgage and home equity line of credit will make your monthly budget easier to mange by providing you one lower monthly payment. Additionally, you will qualify for a lower interest rate on your new mortgage than the one you were paying on your home equity loan. Home equity loans come with higher interest rates than your primary mortgage because there is additional risk for the second lender. The home equity lender passes this risk on to the borrower in the form of higher interest rates.Refinancing is also not without risk. The main disadvantage of refinancing your mortgage is that you are starting your amortization all over again. At the beginning of your mortgage, most of your monthly payment is applied to interest and very little goes to repaying the loan principle. When refinancing your mortgage there is the additional risk of overpaying for the new mortgage loan. To avoid overpaying for the new mortgage it is important to shop around from a variety of mortgage lenders and brokers. When you compare loan offers be sure and compare all aspects of the loans, not just the interest rates. You can learn more about shopping for the most competitive loan offer by registering for a free mortgage guidebook.
Today there are many home owners that have paid their mortgage on time, but have found themselves in an adjustable rate mortgage, that has adjusted or is scheduled to adjust in the near future. Now they have good credit, good mortgage history, but the problem is they cannot refinance as they owe more than their home is worth. Well so they’ve been told, but one insider secret option that is available to home owners in this situation is a short refinance.If the above scenario describes your situation, then your first step towards a short refinance is to contact your lenders Loss Mitigation department to see if they would be willing to participate in a short refinance. If they say NO, then you will want to ask what other options are available to you, such as a loan modification, and IF they say yes, then great, you now need to find a short refinance expert to get the ball rolling.You will want to find a Mortgage Expert that has experience with loss mitigation and who specializes in Short Refinances. This is not time that you want to just pick any mortgage broker from the yellow pages or to let the family friend that is a mortgage broker use you as a guinea pig. Short Refinances are a complicated transaction and require a lot of attention and a great deal of knowledge of the loss mitigation procedures.Now to start the process you will need to contact you lender and let them know you are considering doing a short refinance and to send you the short refinance package. In this package you will have to fill out an application, a personal financial statement that will list all you income and expenses, 2 months recent bank statements, 2 years tax returns, current paystubs and a hardship letter. The hardship letter is simply an explanation of why you can no longer afford your mortgage payments and why you need to refinance. You want to make these letters simple and to the point, no need to write a 50 page essay.The next step is to get pre qualified with an FHA Lender, the reason FHA Lenders are preferred is because they will give you the highest LTV possible which will make your offer to your current lender more attractive. Once you have the approval you will want to put it with your short refinance package and submit to your lender for approval.Once the package is received, then your lender will order a BPO (Brokers Price Opinion), this is similar to an appraisal, but is an inspection normally performed by a real estate broker in the area to give the lender an idea of the current market value. Once the BPO is reviewed, the lender will give you an offer for the new payoff amount.From here you will want to proceed with you new FHA Loan, which will require a separate FHA appraisal, hopefully the appraisal will have the same or similar value to the BPO, if there is a significant difference, then your mortgage broker will have to go back to the lender and renegotiate. The ideal situation is to get you refinanced without having to bring any money to the closing table, but in some cased the lenders will not bend, and to make the deal work you will have to bring some cash to close.Once the mutually beneficial agreement has been reached, then the lender will issue a release of lien. This document will show what the lender will accept as a net payoff.
How much can you Borrow? The question everyone applying for a loan wants the answer to is “how much do I qualify for? Depending on your credit score & the amount of your revolving debt, a few home equity lenders may let you borrow up to 100% of the appraised value of your home. When you apply for a loan online, always ask the lender about the terms for the home equity loan. How many years is the loan for? Is the interest rate fixed or variable? If you are applying for a home equity line of credit, discuss whether or not there is a minimum draw requirement at closing.Don’t forget to find out about the accessibility. In other words, how do you access to your credit line? (ie. checks, credit card, etc.?) Ask the loan officer if after the draw period expires, whether or not it will you may be able to renew your credit line. If you cannot, find out if the interest rate will continue to be variable for the repayment period. If there are fixed rate options, get them.Verify with your loan officer that there is no balloon payment with the second mortgage. If there is, you may be required to pay off the entire outstanding balance, when the balloon payment is due.How much cash can you get out of your home? If you have good credit, and have for example $75,000 in equity, you should be able access the entire $75,000. There are quite a few home equity lenders that offer equity loans up to 100% of the appraised value of your home. A few brokers and lenders, like BD Nationwide Mortgage can offer you second mortgages up to 125% of home’s appraised value. Typically 125% loans will have some cash out limits. Depending upon your credit score, 125% second mortgages will allow cash back between $25,000 and $75,000 in addition to the debt consolidation.
Whether you have good credit or bad credit, you can find some of the lowest refinance mortgage interest rates online. Looking to the internet is a great way to find the best mortgage deals. First rate lenders are waiting to assist you with your mortgage refinancing needs.Refinancing your home lets you use your home equity to take out money when you need it. You can use it to pay off debts such as high interest credit cards or other high interest loans. You can also use the money for home renovations, repairs or whatever else you might choose.Forget about loan shopping the old fashioned way – going from bank to bank and filling out application after application. Think of how much time you’ll save by using your computer.Finding the lowest refinance interest rate is easy when you shop online. With just one convenient application form you can get quotes from a variety of lenders. By getting refinance quotes from multiple lenders you will be able to find the lowest possible rates.If you are sick of high interest credit card or debt, a mortgage refinance can help to lighten your financial load and let you get back on your feet. If you want to remodel your house, add a swimming pool or pay for higher education, a refinance mortgage can help you do that too.To find the lowest home refinance mortgage interest rate, try shopping online. Finding a low cost home loan has never been easier.
No matter what your credit situation, you can refinance your home equity line of credit. Trading in the unpredictability of adjustable rates, you can refi for secure rates. You also have the option to restructure your debt, enabling you to get out of debt sooner or to extend your terms for more manageable payments.When Does Credit Matter?Your credit score won’t prevent you from refinancing since you already have the security of your home to back your refi. Poor credit will affect the rates you can qualify for. However, you can overcome this with a few tips.First of all, carefully search out loan quotes to find the lowest
rates. You don’t want to base your decision on publicly posted rates since they don’t apply to your credit situation. Instead, request loan estimates based on your unique credit profile, just don’t allow access to your credit report at this time.You can also trim rates by rolling over your line of credit into a
second mortgage or combining it with your first mortgage. These types of loans offer better rates than line of credits, but closing costs are more expensive. Another option is to shorten your loan term to five years. Not only will you save money on actual interest charges, but you will also qualify for lower rates.Are Lowest Rates The Only Goal?There are many loan options that affect your financial bottom line besides rates. For instance, loan terms can save you money on interest or help you reduce your monthly payment. Ideally, you want the cheapest, shortest loan. But if finances are tight, paying additional interest to lengthen your loan may be worth it.Peace of mind is also important to people, especially when it comes to their mortgage payments. That’s why a fixed rate loan can be appealing, even if it has higher rates than adjustable rate loans. Caps, which are negotiable, also offer security for those with adjustable rates.Closing costs and annual fees can also add to the cost of a loan. That’s why you want to consider the APR to understand the true cost of the loan. With a little bit of comparison shopping on your part, you can find a reasonable refinancing no matter what your credit score is.
Most people tend to believe that they can not refinance their manufactured or mobile home mortgage. In reality, however, there are a variety of refinancing options available. You have a mortgage payment and a deed you will receive when you finish your payment, the same as any other type of homeowner, you also have the same home loan options. If your current mortgage rate is higher than the current nationwide rates, or if your credit has improved since moving in, you most likely would save money, or even walk away with money, if you refinance your manufactured or mobile home.Like any other refinance, you are simply taking out a new loan, with better terms, rates, or both, and repaying your old loan in full. This will reduce your monthly mortgage payment. You can even refinance for more than you owe (but less than the home is worth) and walk out with that cash. Maybe you do not need to save money every month but you could get a loan with a shorter term and same payment as you have now.However, what will matter is whether the mobile home is located on your own private property, or if you rent space to put it on. Then things tend to be less favorable as the refinanced amount would only be worth what your home is worth, not including the land. For most homes the true value is in the land. Check with different lenders to see the terms and conditions for your particular state as it varies.Also, do not forget that you must pay closing costs. These can be paid upfront, or worked into your refinancing. You are better off paying them up front to avoid paying 30 years worth of interest fees on your closing costs. You will pay a lot more in the long run for these closing costs than if you paid them upfront.Right now is a good time for any home owner, regardless of type of home, to at least look into adjusting their mortgage. Use the internet for easy comparison of a wide variety of companies. There’s more often than not, a solution for everyones mortgage refinancing problems. Just be sure to do your research first and go in with some general knowledge gained from reading articles, and looking at lenders websites.-M Petrone
Many home owners have the need for extra cash to complete home improvement projects, pay for kids college or consolidate credit card debt. Many times these home owners wonder what option is better a traditional refinance vs home equity loan.Refinance vs Home Equity
Home equity loans offer a great way to tap the equity in your home and turn it into cash without having to do a full fledged refinance or pay the high closing costs that are associated with them.
Home equity loans are available as lines of credit and also normal loans. The home equity loan will function just like a standard mortgage. You close the loans, get your cash and make monthly payments to pay it off.
A HELOC or home equity line of credit functions like a credit card. You have a line of credit that you can use for what ever you chose and you spend it as yo need it. Many HELOC also allow you to pay on the interest only making your payments less expensive.
The only drawback to these types of loans is they do not offer the best refinance home mortgage loans rate when compared to a traditional mortgage.
Standard Mortgage Refinance
The standard mortgage refinance will also allow you to tap the equity in your home and turn it into cash. It will offer the best refinance home mortgage loans rate and also give you terms up to 30 years.
It does have much higher closing costs associated with it but often times they can be rolled right into the loan reducing out of pocket costs. These loans are typically used for large cash requirements
One of the quickest, easiest, and fastest ways of getting cash for debt payments is through the use of home equity loans. Many people may think that their loan may not get approved because of a poor credit rating. There are lenders willing to make loans for these situations.You could refinance a home mortgage loan even if your credit score is low. The terms of the loan may be less flexible than what you would desire. Also finding an institution that offers low interest rates, great terms, no hidden extra charges, or fees is tough.Many institutions rely on FICO score in order to make lending decisions. The FICO score is based upon many factors. The 3 major credit bureaus are TransUnion, Equifax and Experian. They collect information from various sources and provides credit information about individuals, consumers, and organizations for various reasons. It’s mainly designed to determine credit worthiness or ability to pay debt in a timely manner.A credit score could range from 300 to 900 and is determined by a variety of factors such as open debts, past financial activity, new credit applications and several other factors.Most lenders seek to lend in the average range. If the credit score is below 600, the credit industry considers that individual in the high risk bracket.It is critically important to always read and review the terms of the home equity loan contract before signing the paperwork. Never hesitate to ask should a question arise.It is still possible to get a home equity loan if you have a low credit score. The interest rates may be high and may accumulate into the thousands during the life of the loan. A way to get around this is to refinance for a better rate later on. The ability to refinance the loan may depend upon whether your credit improves or not.