Category Archives: Finance

Mortgage

Factors to Think of on Your Search for a Favorable Mortgage Rate

MortgageYou will most likely need a mortgage to fund your home purchase. In terms of mortgages, however, one size does not fit all. Getting a mortgage that specifically works for you is essential.

The chances are that you might be eligible for several types of home loans. Getting one with the best mortgage rates in Utah should then be your ultimate goal. Here are the essential factors that will influence your choice of an ideal rate.

Your Current Needs and Circumstances

Your acceptable mortgage rate will largely depend on the house you want and how much you can afford in down payment. Your current credit rating affects the rate your lender will offer. Borrowers with scores above 800 get lower interest rates. You could consider improving your rating before applying for a mortgage.

Your Future Plans

The monthly payments for long-term loans are typically lower. However, you ultimately pay higher interest rates over the entire loan period. Your plans influence your ideal term. If you want to finish your payments early and focus on other investments, then a short loan period is perfect. If you’re going to stay in your house for a long time, fixed-interest rates might be your perfect choice.

The Available Lenders and Loan Estimates

Get multiple options from various lenders before settling on the best one for you. This will help you comprehend your options and give you bargaining power. You should however not base your decision solely on interest rates and loan amounts. Various other charges come with mortgages. Insurance, prepayment penalties, and closing costs are some of them.

Regardless of your mortgage type, you will pay for closing costs. These costs vary among lenders. They include various taxes, insurance, and professional fees. Some lenders include these expenses in your loan while some demand for their payment upfront. Ensure you discuss and understand these costs with your lender before signing your mortgage.

Types of Mortgage Lending Institutions

A mortgage agreement needs to be signedThere are many advantages of buying your home using a mortgage rather than cash. Shopping for the right one can be overwhelming, however. Another critical factor is the mortgage lender you choose to work with.

A mortgage company is a financial institution that helps individuals secure mortgages for purchasing a property. Irrespective of the mortgage company you choose to work with in South Jordan, financial expert citycreekmortgage.com states that a loan officer will help you with the loan application process.

Here are the typical kinds of mortgage companies you can choose from for your home loan.

Retail Banks

Banks are perhaps the prevalent mortgage lenders available for home loans. These range from large banks to credit unions and small local banks. They are involved in underwriting, approving, and closing home loans for approved clients.

They typically give clients who use their other financial services lower interest rates.

Mortgage Brokers

A broker is an intermediary between homeowners and banks. They do not lend you money directly. They can shop for reasonable rates for you across lending companies and help you with the loan process. Mortgage brokers come with a wealth of experience in the home loan market.

They can offer invaluable advice and ensure you get the most suitable loan.

Mortgage Banks

These firms underwrite, consent and close loans for their clients. They then sell these underlying loans to investment firms and retail banks who bundle them into mortgage-backed securities (MBS). Larger banks can retain the servicing rights, but small mortgage banks sell the rights.

The loan agent here controls your loan process from its beginning to end.

 

If you are looking for a fast loan process, mortgage brokers might be the ideal solution for you. Though credit and retail banks offer low-interest rates for their loans, they might not provide other loan types. Keep in mind that interest rates change daily and this should not be your deciding factor.

4 Sure Ways to Spot a Predatory Lender

Lender making the client signWhile most lenders out there are reliable and professional, it still pays to be extra careful when thinking of taking a loan. In these tough economic times, you need to avoid questionable lenders looking to make money out of you in exchange for a rotten deal. Here are some warning signs of a predatory lender:

They have scanty references

When shopping for a loan, an ideal way to know whom to work with is to find references. Start by looking at online reviews of the banks on your list. Arffinancial.com noted that a reputable lending company that offers hospitality financing would usually have positive testimonials from previous clients. If you chance upon a negative review about a lender, it’s a red flag. Move on and keep shopping.

They ask you to make false statements

If a lender asks to falsify any part of your statement, walk out — and do it quick. They may seem to be helping you land a loan more easily, but don’t fall for that deception. What happens when both you and your lender have to face criminal charges when the truth comes out?

They pressure you to borrow more than you intended

When your lender keeps pushing to overleverage yourself, it’s an early warning sign that you should look elsewhere. The lender knows that if you can borrow a huge amount of money, there’ll be a bigger commission check for them. You’ll be the one stuck with the overwhelming debt while they laugh all the way to the bank.

Their interest rates appear exaggerated

It's normal to encounter higher than normal interest rates when you have bad credit, but be wary when a lender’s rates appear abnormally high. Some predatory lenders put their interest rates 1% or 2% higher so they make a bigger commission. Shop around and check what others are offering before falling for this trick.

While a loan can offer a quick solution when you’re facing financial woes, you need to be careful before signing any contracts. Be diligent to avoid predatory lending.

House keys over mortgage application form

Buying a House with Cash? Consider These Factors First

House keys over mortgage application formThese days, many aspiring homeowners have various options to buy their first home. The programs offered by the government, for example, allow more people to own a house.

But some people think they should buy their homes with cash if they have the money anyway. While it also has its pros, here are three disadvantages that you should consider when buying your new home upfront.

You lose the chance to get financial help from lenders and the government

Let’s assume that your preferred property increases its market value in the next two or three decades. If you get a mortgage to buy your home, your ROI becomes higher knowing that you didn’t pay it in full in cash and you take advantage of the tax benefits you can get. If you don’t want to be tied to a mortgage for 30 years, you can have it refinanced when you get more money. You may also opt for an FHA loan program to make the process of home ownership easier. With proper planning, you can become debt-free in as little as 10 years or even less.

You’ll have to sacrifice your liquidity

For most people, it’s hard to sacrifice liquidity. If you do end up selling your property in the next few years, the process can take more time. If you buy your home in full today, it might take some time to recover what you paid for if you end up selling it.

You’ll end up putting all your eggs in one basket

If you buy your new home in cash, it’s like putting all your eggs in one basket. It has its own set of downside. Diversification is key to making your assets grow. For some people, real estate is a liability because of all the other expenses tied to it. While it is tempting to buy it in cash and not worry about monthly mortgage payments, getting a loan could be better because you’re not putting all your money in just one asset.

There are more benefits to getting a loan instead of buying your house with cash. If you’re planning to buy a house, weigh your options carefully to make the right decision.

A Borrower’s Guide to Getting the Best Mortgage Rate

Couple signing a loan contract

The ability of a borrower to get the best interest rates on a mortgage doesn’t just depend on comparison shopping or his credit score. Lenders look at different factors when deciding if a consumer qualifies for a loan and what interest rate they should offer. Mortgage rates can vary by many percentage points based on which payments can burgeon by thousands over the lifespan of a loan.

Lenders always look at specific criteria to ensure that borrowers are well qualified for affordable interest rates.

Evaluation Criteria Used by Lenders

Credit Score

The current lending market is based on tier pricing, which means interest rates may depend on credit scores. It is important to have a score of 750+ to qualify for the best mortgage rate in Salt Lake City or elsewhere. If your credit ratings are stellar, you can get a good rate. The lowest score that a lender will consider is 620, with a down payment of at least 10%. People with poor credit scores can do a variety of things to improve their scores and qualify for better interest rates.

Stable Jobs

Lenders also look at a borrower’s work history. Being unemployed for a long period, as well declining income, won’t help an applicant’s cause. For those who are self-employed, getting a loan could be more difficult.

Income to Debt Ratio

There are two aspects to this ratio considered by lenders – the front end and the back end. The back end ratio takes all of the monthly debt payments into account and divides it by the gross income per month. The front end focuses on housing related costs. Lenders want the front end to be around 28% and the back end ratio to be about 36%. This is considered the ideal number, but lenders do offer a bit of leeway to borrowers based on their general history.

Down Payment Amount

Whether you are trying to get a loan in Salt Lake City or in Houston, the minimum down payment required by lenders is at least 20% of the purchase price of a home. Those who are able to pay 20% will get the best possible mortgage rate. Those who cannot need to shell out more toward the cost of a loan.

Once a borrower meets these criteria, the next step is to do comparison shopping. Many reliable websites provide information on mortgage tables. Shop around and get a loan that meets your needs.

The Benefits of Trading in Foreign Exchange

Foreign Exchange RateForex trading used to be the domain of banks and corporate clients. However, with the rise of the Internet, it has become easier for retail traders to trade foreign exchange and make profits from their trading.

Forex trading is the buying and selling of currencies. If someone says the EUR is trading at 1.3500, the Euro costs 1.3500 per US dollar. The main goal of a Forex trader is to buy a currency at a low price when it is weak and sell it for a higher price when it becomes stronger to make a profit.

There are many ways you can benefit from trading foreign exchange.

1. The market is open 24 hours a day.

There are four major foreign exchanges spread out across various time zones, and they overlap with each other so that the market is open all day from Monday to Friday. The best trading times are when two exchanges are open, such as when the New York and Singapore Forex are both open from 3 to 5 p.m. EST.

2. Volatility gives way to opportunity.

In trading stocks and futures, volatility is a disadvantage. However, volatility in Forex is a different thing. Volatility refers to the rate at which currency prices change. Without volatility, prices remain stagnant, eliminating the opportunity to make profits.

3. There is little barrier to entry.

You don’t need $10,000 to start trading. You can start a micro account with only a phone, Internet access, and $50 in your account. Moreover, the cost per transaction equals the difference between the bid and the asking price. Brokers make money out of each transaction, but the cost is much lower than trading stocks or futures.

4. You can use leverage.

Forex allows you to trade on credit, which is called leverage. For example, you have $1,000, and you are trading on a 50 to 1 margin, giving you a trade value of $50,000. The trade nets you 100 pips, which translates to $500 in profits. If you were not trading on margin, you would only have $100 in profits.

As you may have surmised, the world of Forex trading is fast-paced and exciting, but it is not for the faint of heart. It is best to start off with a small amount and continue learning as you go.

Odds in Your Favor: Be an Attractive Mortgage Applicant

Mortagage ApplicationIf you’re like most buyers, you probably need a mortgage to finance a home purchase. While there is no sure way to get the loan you want, you can do some things to become an attractive borrower. The goal is to boost your financial situation, making sure that you have the capability and finances to afford the loan.

Mortgage companies in Tempe share how you can improve your chances of scoring a mortgage:

Have an Accurate Credit Report

Lenders use your credit report to determine if you are eligible. Be sure to get a credit report from major credit rating agencies for checking and making sure it is error-free. If you found a discrepancy, contact the agency to fix it. The ideal time to check your report is six months before the application, so you’ll have time to correct the mistakes. You should also work to improve your score.

Lower Your DTI Ratio

Debt-to-income (DTI) ratio matches the amount of your debt to your income. If you have a low DTI ratio, you’re likely to qualify for a loan. Lenders prefer a ratio of 36% or lower, with no beyond 28% of all debt going to monthly loan payments. Some still qualify as a borrower with 43% DTI, but beyond that results in denial because of the high amount of debt.

Make a Big Down Payment

A large down payment shows the lender that you know how to save and have financial discipline. This also lowers your loan-to-value (LTV) ratio, increasing your chances of getting the loan you want. A higher down payment also lowers the amount of mortgage you need to borrow, making qualifications a lot easier. The ideal payment is 20% or more, which helps you avoid private mortgage insurance (PMI).

If you want to be attractive in the eyes of lenders, keep these things in mind. Begin the process by checking your credit reports and improving your score. Then proceed in lowering your debt-to-income ratio by reducing your monthly recurring debts and increasing your income. Saving for big down payment is also essential in improving your chances.

Beat the Investing Gap: Investing Mindset Hacks for Millennials

Rentals in Turnkey Millennials are known to be risk-takers. They relish challenges and dive head first into anything that excites them, be it learning a new language or traveling on their own. But there is one thing that millennials aren’t so much fond of — investing.

According to a survey, only 9% of millennials see themselves as investors. More interestingly, only 62% of them said they have investment accounts. While the survey also said that they are willing to be educated about investing, a majority are still hesitant about actually doing it.

What’s stopping them from being investing-savvy? One probable reason is that they still don’t have the mindset of an investor. It’s how they look at the personal wealth that’s making the difference.

If you want to know how to develop an investor’s mindset and finally reach your financial goals, take a look at the following:

Make money work for you

Make your money work for you, not the other way around. Create a proactive plan where you consciously lower your spending and allot more budget for investing. One example is to set aside a part of your income to savings and investments then use the remaining as your budget for the whole month.

Arm yourself with options

If you keep stumbling upon the phrase, “Don’t keep all your eggs in one basket” — it’s because it’s true. The key here is to spread the risks that come with investing. If you already have investments in mutual funds, consider investing in real estate. Turnkey rental properties, for instance, historically give decent returns in the long run. In case the stock market hits a snag like what happened to China in 2015, your entire portfolio will not that affected as you have other investments.

Have a plan B

Investing is all about taking risks. To protect yourself and your financial future, make sure you have a plan B. Create a sizeable emergency fund that should cover 3 to 6 months worth of your monthly expenses. Get insurance plans so you’re covered if ever you find yourself in a financial or health problem.

Think long term

Lastly, think long term. This is probably the hardest part as sometimes it’s hard to feel the difference when you’re just starting. But invest diligently and smartly and your future self will thank you for doing so.

A change in perspective can be all that millennials — and you — need to set yourself to financial success. When you have in your finances order, you can breathe easier and take on life’s other challenges head on.

Have Your Car Repair Service Stay Ahead of the Curve in a Tough Market

Car ServiceWhile the number of cars on the roads is increasing every year, car repair shops have to put more efforts to remain competitive. Some car repair service providers often have trouble landing more clients, and it lowers their bottom lines. 

People no longer patronise your car repair shop simply because you are open for business. Rather, you have to give them a reason to become your customers and have the privilege to fix their vehicles.

Market efficiently

One of the most effective ways to grab the attention of the prospective clients is to display a profound sense of knowledge. You should not embark on a self-praising promotion of your service. Instead of telling customers how efficient and your service is, opt to demonstrate your knowledge. It would entail establishing a professional website for your business. Be sure to populate it with thoughtful, informative, and helpful pieces. People regularly turn to the internet when facing car trouble. By positioning yourself as an authority figure, people will come to trust and depend on your advice. The rapport that results from post engagements makes it easy to sell your services to them.

Go green

Demonstrating a work culture that attests to your commitment to conserving the environment earns you brownie points. It helps you to stay ahead of the curve and win over more clients. You can begin your journey by contacting Waste Petroleum Combustion Limited, one of the popular petroleum recovery services in the region. Such services recycle used engine oil into other useable products. As a result, it reduces the amount of oil-related pollution on land and in waterways. Raising awareness of your commitment to such environmental conservation initiatives could increase your client base. People often appreciate such thoughtfulness and will reward you by getting your services.

Have excellent service

People treasure their cars. They will only frequent your premises if you demonstrate the ability to deliver a superior service. Ensure that your staff members have the relevant qualification and skills. Similarly, make sure that you have the best tools and equipment on the market. Use of superior replacement parts will also win over clients.

Growing the client base for a car repair service can prove to be a bit tricky. Fortunately, you can stay ahead of the competition with a little bit of planning and preparation.

Things to Keep in Mind when Buying Your Second Home

Buying Your Second Home in ChristchurchYou may not have fully considered it, but getting a second home can be a great investment, too. Whether you want a rest house or you’re preparing for retirement, a second real estate property can serve different purposes.

But this is not an easy undertaking, especially if you don’t have a sizeable budget in your hand. There are also a lot of things to research about, as this is an investment.

If you’re still at a loss, here are some tips that will help you out in this:

Your Financial Standing

The first thing you need to consider is your current financial standing. You need to make sure that your finances are secure. Otherwise, you’ll lose money when you buy a new house. If you’re planning to get a new home, make sure that you have a stable cash flow. Other than saving up for it, you always have a choice to make more money by opening a business or getting a second job. Lessen the burden by taking a flexible mortgage.

The Price

Keep in mind that acquiring a new home comes with a lot of expenses, from mortgage to insurance. Make sure to take into account all the costs involved, so you have all your bases covered. You can lessen your expenses by getting the right agent or representative. Consider other factors that affect the property price, such as location and amenities.

The House

Once you have chosen a location, inspect the property thoroughly. This is especially true when it comes to buying an old home. If you can, take a professional or someone who can properly inspect every nook and cranny, such as a Christchurch plumber like Walton Plumbing or a civil engineer.

These are only some of the things to keep in mind when buying your second home. May they help you find the home that is right for you and your family.