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Investment Property Loans #student #loan #without #cosigner


#investment property loans
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Investment Property Loans

What are Investment Property Loans?

When an individual purchases property that will not be used as a place for residence, but rather for profit, the property is considered an investment property. It can be very expensive to personally fund these real estate investments, especially for beginners who often do not have the funds to pay off an investment property fully. Because of this, these investors need to obtain funding for other sources. They can use investment property loans in order to avoid going into their own funds.

Investment property loans can be used for different types of investment properties such as:

Short term rental properties: These properties are often used for vacations.

Long term rental properties: These properties are often rented out by individuals who do not have the financial steadiness to own a home.

A home near the individual s primary residence: This home is not purchased with the intent to be resold or rented out.

What Affects the Rates of Investment Property Loans?

There are many different factors that can affect the mortgage rate for the investment property loan.

Investment property loans that do not have a down payment in the contract are also known as an 100% mortgage. While there is no initial down payment, these loans may have a higher interest rate.

The location of the rental property greatly affects the rates of investment property loans. If the property is within a good neighborhood that also has low vacancy rates, the lender assumes that the individual receiving the loan can follow the payment schedule, which allows the lender to give a lower rate.

If a rental property already contains a tenant who is dependable and who pays a monthly rental amount that is greater than the mortgage payments on the property, a lender is more inclined to give a better rate. When a house must be fixed up before reselling, the lender must be assured that the individual can do the repairs while making the monthly payments when the home has not been sold.

How to Get Investment Property Loans

The first step in investment property loan shopping is to just look around and get an idea of the interest rates in investment property loans. Doing so can help ensure the best deal as well as improve chances of getting approved.

Next step in getting investment property loans is to simply apply. After finding a lender, they will give a loan application that requires certain pieces of personal information. This application will then be verified. The lender will often look at a credit report and income or even how much cash the individual has on hand.

Finally the lender will make sure that the individual has enough cash for the down payment. Most investment property loans usually ask for at least 25% for this down payment, although some request up to 35% due to the riskiness of investment property loans.


How to Get Secured Loans Against Property #emergency #cash #loans


#loan against property
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How to Get Secured Loans Against Property

The use of property as collateral is a common way to borrow money. If the borrower fails to fulfill the terms of the loan, the lender may take possession of the property. Prlog.org describes a secured loan as one given or disbursed against the mortgage of property. The loan is given as a certain percentage of the property’s market value, usually around 60% – 75%.

Other People Are Reading

Do your homework. If you’re unable to repay a secured loan, you risk losing your property used as collateral. Weigh the pros and cons prior to applying. Identify the lender that offers the best terms.

Review the eligibility requirements and determine if you are likely to qualify before applying. Eligibility criteria includes income, savings, debts, value of property mortgaged and credit history.

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A foreclosure is a secured loan that resells the property to recoup monies lost on an unpaid loan. A foreclosure is only.

When you use your property as collateral for a loan, the property secures your debt for the bank. If you fail to.

When you use property to secure a loan, you are placing that property down as collateral. The lender puts a lien on.

A secured loan is a type of lending instrument in which a piece of property is used as collateral for the money.

When applying for a personal loan, the lender may ask you to put up some of your property as collateral. If you.

On the other hand, secured loans such as home mortgages can be for 30 years or more, while a new car loan.


How SMEs Can Use Property Loans to Lower Their Borrowing Costs #203k #loan


#low interest rate personal loans
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How SMEs Can Use Property Loans to Lower Their Borrowing Costs Propwise.sg Monday, 16 November, 2015

Aktive Learning

By Paul Ho (guest contributor)

Singapore’s SMEs makes up 99% of all enterprises, employ 66% of the workforce and account for 48% of the GDP. SMEs are defined as having revenues of less than $100m and with a staff of less than 200.

Singapore has narrowly averted a technical recession. But the PMI is below 50%, indicating a contraction in the manufacturing sector.

Figure 1: Purchasing Manager’s Index (PMI), Singapore Institute of Purchasing and Materials Management (SIPMM)

SMEs have limited access to loans during tough times

A drop off in demand means that companies are hardly growing their top lines and may go into the red. This is especially true for SMEs with less than $10m in revenues.

Figure 2: Singapore Quarterly GDP Growth rate (TradingEconomics, SingStats)

Singapore’s corporate default rate of Corporations listed on the SGX is below 2%. SMEs likely have a higher default rate of at least 3 to 4%.

Figure 3: Corporate NPL Ratio, Financial Stability Review 2014, MAS

During the Global Financial Crisis in 2008, Singapore’s SMEs experienced a limited access to capital and funding. This led the government to enhance the various schemes that are in place to help SMEs retain access to credit. Most of these schemes involve the government risk-sharing with the banks on loans to SMEs.

In short, this means that during tough times the banks cut back on SME lending exposure due to the potentially higher Non-Performing Loan risks. Hence funds will likely dry up during uncertain economic periods when SMEs need credit the most. Hence SMEs will be exposed to elevated funding disruption risks and increased cost of funding during recessionary periods, and need to take action now to secure funding.

Discerning future interest rate trends by looking at the bond yield curve

The bond yield curve gradient has become less steep, indicating slower growth. There is also higher mid and long term interest rate expectations, indicating inflation expectations or simply a higher interest rate environment. The 20 year Bond is currently at 2.9%.

Figure 4: Singapore Bond Yield Curve End 2014 versus Nov 2015, Asian Development Bank

Hierarchy of Borrowing Costs: Secured versus Unsecured Loans

The impending weakness in the economy poses greater risks to SMEs than to large corporations.

Secured lending refers to lending in which an asset is pledged. Secured lending presents less risk to the lender and hence they charge lower interest rates.

Unsecured lending does not require pledged assets. Hence this presents greater risk to lenders and are more expensive. Small businesses usually have fewer assets to collateralize against and hence use secure loans less frequently. Unsecured Business Term Loan rates for SMEs are usually in the 10+% range, depending on loan size as well as tenure.

The Micro Loan Program by Spring Singapore is also a good source of funding. However, not many companies qualify, and for those who qualify, they may not be able to obtain the maximum $100,000 loan. Interest costs start from 5.5% with up to a four year tenure.

Problems faced by SMEs and their owners in obtaining credit

Many SMEs may not have the right financing or salary structure. SME bosses tend to under-declare their income and instead declare dividends. Whilst this reduces their taxable income, with the new Total Debt Servicing Ratio (TDSR) rule, this also impedes many SME bosses from borrowing more to buy their homes.

SMEs are suffering a margin squeeze. Faced with borrowing costs of around 10%, labour costs that are 5 to 10% of revenue, and other operating costs which could take up another 5 to 15% of revenue, these businesses need a gross margin in excess of 30% just to break even. Not many industries can offer gross margins in excess of 30%. Hence SMEs are especially sensitive to top line growth for those with 20+ to 40% gross margins.

With market uncertainty, access to funds for SMEs could be even more restricted in the coming one to two years.

How can SMEs overcome high cost of funding issues?

SME bosses should start to realize that under-declaration of income impedes borrowing and start to rectify this situation to reflect their true income. While it is important to have a tax efficient salary structure using a combination of Salary, Director Fees and Dividends, it is worthwhile to review this to be eligible for adequate funding.

SMEs, especially those whose directors who are currently in their late 30s and early 40s and who have bought their own residential homes, could be sitting on tied up equity in their properties. Residential home loan rates are around 2%. They could free up this capital by refinancing their homes and use the money to invest prudently in their own business. With this reduced cost of funding, the business owners could immediately save

10% off borrowing costs.

Case Study: SME owned by 2 Directors and 3 Shareholders

Does it make sense to borrow against your home for a company in which you’re only one of the many directors?

In this case I came across, the company had two directors and three shareholders. The two Directors owned 35% each of the business, while the rest of the shareholders held 10% each.

They needed $500,000 of funds for business expansion.

We advised the firm to structure a Director’s resolution to approve the company to request for a Shareholder Loan to the company at a 5% interest rate. The two major shareholders cum Directors held 70% of the shares, and hence were allotted $350,000 of the loan amount. Shareholders or Directors who did not wish to lend to the company at the approved 5% interest rate may give up their allotment. The unused allotment may be used by the other directors/shareholders equally.

These two major shareholders then refinanced their residential property loan with a cash out (equity term loan) of $400,000 at 1.8% interest. They then lent their company $400,000 at a 5% interest, making a decent return on their loan to their own company. Another two shareholders took up their allotment and lent the company $100,000 at the same 5% interest.

In this way, the company had access to cheaper capital, boosting its chances of survival and creating a fair debt offering for all directors and/or shareholders who wanted to participate. It’s similar to preferential bonds which only Directors and shareholders can participate in.

SUMMARY

SME owners should get their personal income structure right to optimize for both tax efficiency and borrowing capacity. They can then leverage on cheaper secured mortgages to free up equity from their house to lower their business borrowing costs by structuring a Director’s Loan to company.

In order to lock in low rates from the residential property equity loan (cash out), it might be safer for SME owners to consider a three to five year fixed rate structure to hedge against rising interest rates.

Investors with at least $300,000 of spare cash could also get in on the game to bridge the gap left behind by banks and lend to growing companies who can afford to pay 14 to 18% per annum in interest costs. But thorough risk assessment needs to be done to minimize default rates. Convertible loans can also be structured to give investors additional upside if there is a liquidity event (e.g. acquisition).

By Paul Ho, holder of an MBA from a reputable university and editor of www.iCompareLoan.com. Singapore’s first Cloud-based Home Loan reporting platform used by Property agents, financial advisors as well as Mortgage brokers. Posted courtesy of www.Propwise.sg. a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide .


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RBA Cash rate changes in past 5 years:

What is best fixed rate home loan ?

Bank offer very lower rate on introductory interest rate to sign up new clients to their home loans. But if client does not have any historical record about their usual interest rates, that means they are signing up for something very expensive without any prior knowledge.

To select the best fixed rate home loan, we need to understand the current market situation in term of reserve bank cash rate. If the cash rate is at usual state, or lower than usual state, it means it is risk free to take a fixed rate home loan. Some times when the cash rate remains too low, at that period of time variable rates from banks become lower than previous years fixed rate, or a fixed rate from year before. As a result it is lower in risk factors to take home loan at maximum of 3 years fixed rate. In most cases difference between total savings in 3 years on interest from a 3 years fixed rate home loan with total savings on interest from a 5 years fixed rate home loan is insignificant.

Considering above it is lower in risk to have maximum 3 years fixed rate home loan to have best benefit on interest. And it is better not to have a fixed rate home loan when cash rate is at pick stage and it is obvious the cash rate will be reduced by next year or so.

Click here to find current home loan interest rate offers.

What portion of home loan should be on 3 years fixed rate home loan ?


Apply for Loan against Property – Kotak Mahindra Bank #instant #cash #loans


#loan against property
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1800 102 6022

What is the maximum amount I can borrow?

In case of Commercial Property Loans or Loans against an existing property you can borrow up to 55% of the cost of the property

How will my loan eligibility be determined?

Your repayment capacity as determined by Kotak Mahindra Bank will help decide how much you can borrow. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependent’s, spouse’s income, assets, liabilities, savings history and stability, and continuity of occupation.

In how many years can I repay the loan amount?

You can opt for a loan period of up to 12 years, which can vary depending on the purpose of the loan and your profile.

Who can be my co-applicant?

If you are an individual – your spouse, your parents, or even your major children can be your co-applicants. The co-owner of a property has to be a co-applicant, but a co-applicant need not be the co-owner of the property.

When will the loan be disbursed?

You can take the disbursement after credit, technical and legal appraisals of the property have been done, besides execution of relevant documents deposit of original property documents is required to be completed prior to disbursement. Further, you should have invested your own contribution amount towards the property. ‘Own contribution’ is the difference between the cost of the property and the loan amount.

In how many installments can the loan be disbursed?

The loan will be disbursed in full or in suitable installments taking into account requirement of funds and progress of construction, as assessed by Kotak Mahindra Bank.

Does the agreement for sale have to be registered?

Yes, very much so. In many states in India, the agreement for sale between the builder / seller and the purchaser is required by law to be registered. You are advised, in your own interest to lodge the agreement for sale at the office of the Sub-registrar appointed by the State Government under the Indian Registration Act, 1908.

Does the property have to be insured?

Your home is your pride and joy. Don’t let unplanned events take it away. Property insurance will take care of home in case an unforeseen event strikes. That way, you’ll always have peace of mind knowing that you and your loved ones will be assured of a roof over their heads.

What kind of security is required?


5 Tips For Financing Investment Property #unsecured #business #loan


#investment loans
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5 tips for financing investment property

Shy away from big banks

If your down payment isn’t quite as big as it should be or if you have other extenuating circumstances, consider going to a neighborhood bank for financing rather than large, nationwide financial institutions.

“They’re going to have a little more flexibility,” Huettner says. They also may know the local market better and have more interest in investing locally. Mortgage brokers are another good option because they have access to a wide range of loan products, but do some research before settling on one.

Recommendations from friends also are a good way to vet lenders, and investors shouldn’t be afraid to inquire about their credentials, and then verify them. “What is their background?” Huettner asks. “Do they have a college degree? Do they belong to any professional organizations? You have to do a little bit of due diligence.”

Ask for owner financing

A request for owner financing used to make sellers suspicious of potential buyers, because almost anyone could qualify for a bank loan, Huettner says. But these days, it’s become more acceptable due to the tightening of credit.

However, you should have a game plan if you decide to go this route. “You have to say, ‘I would like to do owner financing with this amount of money and these terms,'” Huettner says. “You have to sell the seller on owner financing, and on you. You need to present a picture to someone so they’re not filling in the gaps with their worst fears.”

Think outside the box

If you’re looking at a good property with a high chance of profit, consider securing a down payment or renovation money through home equity lines of credit, from credit cards or even from some life insurance policies, says Ben Spofford, an Ohio home remodeler and former real estate investor. As always, research your investment thoroughly before turning to these riskier sources of cash.

Financing for the actual purchase of the property might be possible through private loans from peer-to-peer lending sites like Prosper.com and LendingClub.com, which connects investors with individual lenders.

Just be aware that you may be met with some skepticism, especially if you don’t have a long history of successful real estate investments. Some peer-to-peer groups also require your credit history to meet certain criteria.

“When you’re borrowing from a person as opposed to an entity, that person is generally going to be more conservative and more protective of giving their money to a stranger,” Spofford says.


Investment Property Loans – Financing


#finance loans
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Introducing the Dwell Finance Foundation Loan

Build Your Future. One Rental Property at a Time

Mortgage Loans For Real Estate Investors

Use Dwell Finance Foundation Loans to purchase or refinance individual rental properties in order to start, expand or leverage your real estate investment portfolio.

Get instant rate quotes and apply online for a Foundation Loan using the fast and easy Dwell Finance online lending platform.

Build confidence for your next property negotiation knowing that you are pre-qualified as a Dwell Finance investor, and when you find the right property, we’ll do the rest to get it funded.

Real Estate Investing Made Easy

  • No Hard Money – Competitive Rates on 30-Year Loans
  • No Personal Income Verification, Tax Forms or W-2s Needed i
  • No Out-of-Pocket Loan Origination Fees – 1% Origination Fee Paid From Loan Proceeds
  • No Hurdles – Easy Online Loan Quote and Investor Approval Process
  • No Capital Gains Taxes on Refinances ii

i Foundation Loans are business loans subject to investor and business credit approval and other underwriting criteria. Application fees, closing costs and other fees may apply.

ii Every investor’s financial situation and tax liabilities are unique. Please consult your financial and tax advisors in order to determine your actual tax responsibilities.


Members First Credit Union: Land – Seasonal Property


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Land Seasonal Property

Did you find the perfect piece of land? Or perhaps you’re looking for a second home in the White Mountains? Members First can help!

Finding the perfect home can be tough. Sometimes, the best answer is to buy the land and build your dream home in the future. We offer great fixed rates on residentially zoned undeveloped land in New Hampshire. When you find the perfect location, come to us first!

Seasonal Property Loans

When it’s time to get away from life’s stress, a seasonal property in New Hampshire can be a relaxing and reasonably priced alternative to costly hotel stays. If you’re thinking of purchasing a home away from home, a Seasonal Property Loan can help you do it. Make that mountain cabin a reality now!

To learn more about our Land Seasonal Property loans, or to apply for a mortgage loan, please visit our

Questions? Our mortgage representatives are happy to assist by email or phone at (800) 860-3832 or (603) 622-8781, ext 780.