Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts

Jan 28, 2020

Looking For Ways To Finance Your Next Building Project? Look No Further

If you need money to start your next building project, you may be quite surprised by the number of different options you have. However, the options that will actually be available to you will depend on many different factors and these factors will decide how eligible for construction finance you are.

In this short article, we will look at what you can borrow, how you can borrow, and what restrictions you might come across. Please note that while the information in this post is correct, your own personal situation will determine what the best course of action is for you. Speaking to an independent financial advisor will help you to see if you are eligible for construction finance and how to go about getting it.

Different Types of Mortgages

Let’s start with the different types of mortgages that may be available to you. Remember, whether one is better for your needs than another depends on many factors.

Commercial Mortgages

Let’s start with commercial mortgages because they are, in general, the most like private residential mortgages. In other words, you want to buy a property to base your business in (rather than live in) and you don’t have enough money to pay for that property in cash.

Like residential mortgages, the more deposit you have, the easier it is to get a commercial mortgage. However, also like residential mortgages, it is possible to borrow up to 100% of the value of the property. You will need to have an exceptionally good credit history, of course, as a 100% mortgages means a lot more risk for the lender.

We shouldn’t forget though that we’re talking about building projects here as well so you should remember that if you’re going to use a commercial mortgage for renovation purposes, then your renovations cannot be major and that your property needs to still be habitable.

Renovation Mortgage

For more major building projects, such as renovating properties that are uninhabitable, you’ll probably need to look at getting a renovation mortgage. The major drawback with this type of financing is that the amount of money lent is based on the value of the property as it is. This may seriously restrict what you can do with the property.

However, there is a silver lining of sorts. As you renovate your property, its value will increase. By getting your mortgage lender to inspect the property and see that the work has been done, you may have the opportunity to borrow more money using the balance of your property’s new value.

The real problem is that the funds from a renovation mortgage may only be released in stages, so you will have to look at other means of financing your renovations. The good news is that when the renovations have all been completed, you can borrow up to 90% of the value of your renovated property and pay off any outstanding loans you took out earlier on.

Different Types of Loans

Taking out a mortgage is a major commitment and may not be necessary for some circumstances. Let’s look at some other ways of getting financing that may not only be quicker but also cheaper.

Home Improvement Loans

If your next building project is not something as major as renovating a commercial property or renovating an entire house then a home improvement loan may be the way to go. This is especially true if you already own the property that you wish to work on.

Having said that, it is possible to release funds by either remortgaging your property or taking out a personal loan. However, either option will probably only be necessary if you’re doing something major or minor respectively. A good example of when a home improvement loan is suitable would be for something like an extension.

Home improvement loans can either be secured or unsecured. Since a secured home improvement loan is pretty much the same as remortgaging your home, in the sense that you have to pass all the same tests, you should shop around for the best terms. You may end up being better off remortgaging anyway.

Bridging loans

Bridging loans are not the best type of loan to have for a few different reasons. The first and most important one is that they are expensive, substantially more than a standard loan. They are also only for a fixed amount of time so if you end up needing to extend your loan, you’re going to end up paying even more. So why would you take one out?

Bridging loans are often used as a way to borrow money using the collateral of one house to pay for the renovations of another one. For example, you could take out a bridging loan if you need to renovate your new home, but the proceeds from the sale of your last home are not available. Basically, you’re borrowing money to bridge the gap.

Self-Build Loans

Finally, we just have space to talk about self-build loans. This type of loan is specifically for someone who wants to build their own property. This is popular with people who either have some money but not enough to build the complete property or for people who have little to no money.

However, and this is the reason it’s at the end of this article, a self-build loan is difficult to get. There is a high degree of risk with this type of loan because of the myriad of different things that could go wrong. Also, because of the risks involved, your repayments are going to be much higher as are fees and other sundries. While there may be good reasons to look for a self-build loan, other options would almost certainly be worth looking into.

Wrapping It All Up

And there you have it. As was mentioned right at the beginning of this article, there are many different ways to finance your next building project. However, how eligible for construction finance you are will depend on your personal circumstances as these are always the most important deciding factors.

May 15, 2018

5 financial preparation tips for buying a new house in 2018

Tips for buying a new house in 2018
Buying a house is one of the biggest purchases that you will make in your life. Once you decide to buy a house, the next thing is to be well prepared financially. The purchase process seems simple: 1. Like house 2. Put in an offer 3. Offer accepted 4. House owned. In truth, the process of “How to buy a home” involves quite the details. Specifically revolving around finances.

Here are 5 major financial preparation tips to note when buying a house in 2018.

1. Save for the deposit

The minimum requirement for a deposit is 5% of the property value. The higher the deposit you set aside, the better the deal you get when borrowing money from lenders like banks. Home buying tip number 1 is, save for the deposit. Start now.

One of the best ways, for those under 40, is the Lifetime ISA or LISA account. £4,000 a year and when you buy your first home, the government will add a 25% bonus. Which means you have £5,000 (before interest) to use as the deposit.

If you are 40 and above or don’t want to wait for the minimum 12 months that you need to have a LISA, you can use the Help to Buy ISA. You can apply for the government bonus once you have saved £1,600. For full benefit though, even Help to Buy ISA is effective only in the long term.

Understand your requirement and choose accordingly.

Aug 29, 2014

Australians Getting Larger Mortgages at a Fixed Rate

Australians Getting Larger Mortgages at a Fixed Rate
Image via gettyimages
The global economic crisis that began in 2008 has had a big impact on the real estate market in Australia. A recovering economy caused mortgage interest rates to drop after an initial period of tight lending regulations. More Australians were apt to choose variable rates as interest fell, but the trends in borrowing have started to change.

More Australians Opt for Fixed Rates

Why are Australians more likely to opt for fixed rates when they apply for a mortgage? Rates were steadily dropping, but it now appears that the historically-low rates that are being offered to home buyers are starting to level out. This means that more people are hoping to lock in the lowest rates possible by opting for a fixed rate.

Jul 15, 2013

Home Equity Lines of Credit

Have you ever looked around your home and felt it could use a little update? Perhaps the kitchen could needs new granite counter tops or maybe the bathroom is too small or even worse, the den is still sporting that shag carpeting from the 1970’s. If this sounds familiar to you but you are wondering how you might pay for the remodeling, a home equity line of credit might be what you are looking for.

What Are Home Equity Lines of Credit?

May 21, 2013

Practical Tips to Improve Your Credit Rating

As the economy continues to be in doldrums, lenders are becoming very cautious to the people they give credit facilities. Some lenders charge high interest rates to individuals with poor credit rating as a way of mitigating the default risk involved. A good credit rating will definitely boost the chances of getting financial products such as mortgages, personal loans and credit cards from banks and other lending institutions. On the hindsight, a poor credit rating will limit your borrowing options. It is therefore very important to put strategies in place to improve your credit rating. Discussed below are ways you can improve your credit rating:

Mar 28, 2013

Reasons that Justify Your Decision of Refinancing Your Mortgage Efficiently

Refinancing a mortgage involves disbursing off the current loan and replacing the same by taking another one. This new loan can be brought through different means such as from bank or authorized institutions such as Network Capital Funding Corp. However, the cost of refinancing can range from 3% to 6% of the principal amount, and that it calls for appraisal, application fees, and other formalities demanded by the original mortgage. Therefore, it becomes vital for a homeowner to justify her or his decision of refinancing for reaping its benefits. There are several reasons why refinancing is found to be useful, and that each of them has a unique set of pros and cons. So, let’s check them out now!

Dec 17, 2012

Important Things You Need To Know About Manhattan Beach Mortgage Loans

Manhattan Beach is a beautiful city located in Los Angeles, California. The city is highly appealing and there might be no individual who would not like to have a home here. A home is the most valuable asset possessed by an individual and hence for purchasing, one requires to consider various factors. Most of the individuals do not have enough funds to pay for the property they are willing to purchase and here arises the need for taking a loan. It is the best way of raising funds in a short time period and paying it back in a long term as per the rules and regulations of the institute offering it. It is necessary to consult an experienced mortgage professional in order to get a mortgage that best meets your requirements.

Sep 28, 2012

The Budget Deficits and Municipal Bankruptcies

The financial markets today no longer look safe for investing in municipal bonds. With the present U.S. economy assailed with a growth in municipal bankruptcies, the problems that continue to plague America are forever on the rise.

Budget deficits should be controlled by the local governments. In addition, further spats with creditors have to be avoided and so there is need for the deficit cuts by the municipalities. When the local government takes the regular steps in order to survive, the municipal bond investors and their invested amount of the tune of $3.7-trillion will be very much affected. The municipal bond defaulters are the cities in California; viz. Vallejo, Mammoth Lakes, Stockton, and San Bernardino. Compton is the next most likely town to follow suit; the reason being that all theses towns are facing the problem of big budget deficits.

Sep 26, 2012

Consider the Alternatives You have before You Choose Equity Release

Before you choose any particular scheme to release the equity from your home, it is necessary to consider whether you have other solutions to meet your financial requirements. The objective of equity release mortgage schemes is to offer homeowners the opportunity to unlock the value in your property to obtain a certain amount of money.

Different circumstances may make it necessary to obtain money from the equity release schemes. You may need the money to pay for your son’s education or for your spouse’s medical costs. You may also need it to lead a comfortable retired life. However, this is often not the only solution available for your financial troubles.

Sep 19, 2012

Apartment Sales Up, Home Loans Still Down

As consumer demand for homes declines it appears that business is fueling the economy, as lending in the business sector has increased to three-year highs. Despite lowering interest rates consumers have remained conservative and focused on reducing household debt while the business sector takes over the reins of the economy. Home loans rose by just 0.2% during the month of June, which brings the annual average down to just 4.9%, its lowest level in the last 22 years.

May 19, 2012

Life's financial hurdles

For many young people, graduating from an institution of higher education is one of the biggest steps toward adulthood that they have ever made. But what happens when it’s time to go off the beaten path? Navigating the job market, making major purchases such as a car and a home, and figuring out how to pay off all of your debt can be overwhelming at first. But with a little planning and some reflection on what you would like to achieve financially, you’ll be able to clear life’s financial hurdles. Here’s how.

Feb 22, 2012

Learn about low doc loans in Australia

Australians who are considering low doc loans or no doc loans need to understand some key facts about the loan before opting for this type of funding. Since the loan does not require much documentation, or in the case of an investment property might not require any documented proof, it is convenient for self-employed individuals. By understanding a few key points, it is easier to determine if the loan is right on a personal level.

Jan 4, 2012

5 Effective Ways to Refinance Mortgage with Bad Credit

Although it is extremely difficult for people with bad credit to get approved for mortgage loans, but it does not indicate the end of all your options. Refinancing a mortgage loan with bad credit history is not a big deal. It has now become very easy to refinance your mortgage loan with bad credit than applying for an original loan. Mortgage lender will trust homeowners having a good credit profile and have capability to repay the loan. However, they charge higher interest rates. Bad credit is an impediment but it can be dealt smartly. Here are listed 6 effective ways that you can use to learn how to refinance a mortgage with bad credit.

1. Save Money
In order to refinance mortgage with bad credit, it is important to save your money for closing cost and other fees. When you refinance a mortgage with bad credit, it creates a new mortgage. No matter, you refinance with your current home lender or apply for a new loan with a new mortgage lender, you will have to pay start up costs and fees including appraisal fee, application fee and closing costs. So you should be prepared for paying such cost.

Nov 29, 2011

Arranging a mortgage: Is a financial advisor or mortgage advisor better?

The question of whether to ask an independent financial advisor or mortgage advisor for help when arranging a mortgage does not have a clear-cut answer. Either might be suitable, depending on their circumstances and yours.

If you are looking to take out a mortgage, you could seek advice from either a mortgage advisor or an independent financial advisor. Either might be appropriate in different circumstances. The most important thing is to check what their affiliations are, and whether this might affect the advice they give you.

Aug 19, 2011

Things you need to know about contractor mortgages

The term 'contractor mortgage' is a phrase that often recalls memories of stress and untold pressure for many people - and for good reason. It is widely known that applying for any mortgage, regardless of whether it is a mortgage for a contractor or a general option, puts heaps of pressure on a person and takes plenty of time and patience to get sorted. In terms of contractor mortgages however, the stress and frustration can reach boiling point, which is why you need to follow some basic guidelines and tips if you want to get anywhere fast.

Jun 28, 2011

The Short Sale Alternative to Foreclosure

Real Estate Short Sale
(Image via
Most business analysts unequivocally point to the housing crisis as the precipitator of this current economic downturn. According to CNN Money, in 2010, 2.9 million foreclosure notices were filed and more than 1 million people lost their homes to foreclosure. If you are experiencing an economic hardship due to a job loss, disability, unexpected medical expenses, etc., you do not have to be in this number, there are options available to you.

If you have received your Notice of Default letter, detailing the lender's intent to sell your property if you do not make your mortgage payments or if you are depleting most of your income, savings, and surplus funds in order to keep a home that is 'underwater', meaning you owe more on the house than what it is actually worth, you have options, chief among them is short-selling. Of course, this is not a desirable position to be in, but as opposed to going through a foreclosure or being an underwater homeowner, petitioning your bank, for a real estate short sale is perhaps the best option for you in light of your present circumstances. It is a proactive solution in what would be otherwise regarded as an abysmal reality.

A real estate short sale is basically an agreement between the homeowner (borrower) and the mortgage lender to accept a price that is less than what they owe on their mortgage; in this agreement the property is re-listed and sold at a reduced price (less than the balance due on the loan) and the proceeds are paid to the lender. The remaining balance owed to the bank is called a deficiency and it may or may not be forgiven. A real estate short sale can be beneficial to both the homeowner and the bank because they both have the opportunity to mitigate their losses in some way. Be advised that you cannot just appeal to the bank and expect to be let out of your mortgage; the process is generally similar to what you went through when you first applied for your mortgage. You must apply for a short sale through the bank's loss mitigation department and will need to provide proof to the lender that you are in fact experiencing a financial hardship and/or you are upside down on your loan.

In order to get started with the short sale process there are first preliminary items that have to be completed. First, you may need to speak with a tax advisor to determine if their will be any tax repercussions to short-selling your home, because the IRS may consider the deficiency income you would need to pay taxes on. Second, you will need to contact a real estate agent in order to get the ball rolling on selling your home. It’s important to find a qualified real estate agent experienced in real estate short sales, as the process is complex and tedious at times, and you need a professional that can help you navigate the process.

Next, once you receive an acceptable offer from a buyer, prepare a submission packet for the bank. Contact your bank for specific instructions (usually the loss mitigation department), but in general what is included in this packet should be the buyer’s offer, a hardship letter (be detailed in this letter and carefully express to the lender the reasons you are experiencing financial hardship and that you are facing foreclosure and/or upside down), authorization to release loan information, listing contract agreement, two (2) year tax returns, W-2, bank statements from the past two (2) months, personal financial statement. You will want to confirm receipt of these documents.

At this point, there may be periods of waiting and negotiating, as the bank determines if they agree or disagree with your real estate agent’s valuation. Be prepared to defend your calculations with solid evidence. Also, the bank may have additional questions to ask you about your financial situation, so be forthcoming. Your real estate agent should have set the expectations for the buyer that the property is a short sale and so they realize it make take thirty days to three months (on average) for the bank to approve the deal.

Once you get an approval, closing typically happens very quickly, within 30 days.

Again, real estate short-selling can appear at the outset very laborious and time-intensive but in contrast to the alternatives (foreclosure and the detrimental hit to your credit rating), this is option can be of a great benefit to homeowners who need to get out of a less than desirable situation.

Tracey Louis is a licensed real estate agent that has actively invested in real estate investments for a number of years, and enjoys tracking and writing about market conditions.

May 14, 2011

Guest Post: Financing an Overseas Property purchase nowadays

Prior to the financial recession, there was a boom on properties in areas such as the Middle East, Eastern Europe and Asia. Many of these properties now are still up for sale, but at very depressed prices. Thus, now is the best time to invest in overseas properties if you have the finances available at your beck and call.

The current financial doldrums though has contracted the available funds for these kinds of purchases. Many banks and other financial institutions have either gone belly up or have instituted more stringent requirements before approval of a mortgage or a loan.

With these as the landscape in purchasing overseas properties, the following are some tips in finding financing for your overseas property purchase. While there are many pitfalls in the current world market, the following can help you secure your financial back up for your dream home in some oasis in the world.

Save Up

Because many of the financial wells have become scarcer, your best bet in financing your overseas property purchase would be through your personal savings. This may seem absurd as finding financing is imperative to transfer of funds across borders. With the increased interest requirements as well as stricter guidelines in order to be granted loans, saving up can help you control your finances as well as build your home away from home one brick at a time.

Finding Property

Many of the financial institutions have become wary of off plan property purchases because of their inflated values. In order to make your case for a loan or mortgage, you need to find property that is properly valuated and is already up and near completion. Thus doing a due diligence of the properties you seek to purchase must be made in order to assure the financial institution that the investment you would make can be recouped in the long run. Since the prices are already depressed, finding the right property, at the right price and the right fiscal situation can help in the approval of your loan application for your dream home.

Finding Local Institutions

The best way to manage your finances in purchasing properties overseas is by obtaining your loan in your home country. In the process of obtaining your loan, you need to find a bank in the country where you would be purchasing your dream home that is affiliated to the loaning bank in your home country. You would also need to find out the banking processes between the home bank and the local bank, as well as the financial costs as this would add-on to the overall expenses in your property purchase. It would be best to use this conduit as you would have back ups as well as insurance for your transactions, unlike other under the table or back alley processes that may be offered for you for your property purchase.

Finding a Local Agent

Since for all intents and purposes you are still an alien in a foreign land, finding a trustworthy agent and companion to help you navigate the process as well as finances in purchasing property is strongly recommended. In engaging the services of an agent, you would have an expert in the paperwork as well as the processes in the financial as well as documentary requirements in your new home country.

For more comprehensive discussion on purchasing property, you may think about this question - Is inflation the real threat to the UK property market? The author of the above post recommends you to visit at