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What’s so hard about hard money?

The concept of hard money can be hard to understand, but it is a lot easier if you start with the basics. First, hard money refers to a loan that has most of the following characteristics:

  • The lenders are investors rather than banks.
  • The loans are used by real estate investors.
  • The cost (interest rates and fees) are typically much higher than for bank loans.
  • The length of the loan is typically short, for a few months to a few years rather than for decades.
  • The cost (interest rates and fees) are typically much higher than for bank loans.
  • The down payment is typically much h.
  • The loan is back by collateral like a real estate property.
  • Lenders care more about the value of the collateral than they do about the borrower’s finances.
  • The loan is based on the current value of the collateral rather than on the future earning potential of the property.
  • The approval process much quicker than the typical bank.

As with any kind of loan, both the borrower and the lender should do their due diligence. For the lender, that means checking out the value of the collateral, the borrower’s experience, and the riskiness of the deal. For the borrower, that means checking out their options to see what lender fits best with the borrower’s needs, as well as the track record of the lender. The graphic below provides an overview of the process behind a hard money loan:

infographic_hard_money_loans

No deposit home loans as a viable option for new homeowners in Australia

When moving out on your own, you’ll generally start out renting, perhaps renting a room in a friend’s house, sharing an apartment shared with one or more other people, or if you’re really lucky and find a good deal, a place that’s all your own. But while renting has many advantages like being able to move at any time, contract modification options, or not having responsibility for appliance repairs, there’s also something to be said for owning your own home. Home ownership is a dream for many renters, simply because home ownership, while often cheaper in the long run (and certainly more rewarding), can also be quite expensive at the offset. Typically buying a home requires that you provide a down payment on the home itself, and then there are closing costs and moving costs to consider. For many prospective buyers, home ownership winds up being delayed or put off altogether, due to the high cost of a down payment.

Fortunately for prospective home owners, there are such things as no-deposit home loans, though you’ll need to know where to look for them. It pays to let banks know right away that you want a no-deposit loan, so that if they do not have such a loan available, they can let you know right away – and thus you’ll both avoid wasting time and resources.

Banks and other lenders in Australia such as Homestart are able to provide no-deposit home loans that also have low interest rates. But despite these low rates, no-deposit loans are not always easy to find. So when you do find them, it’s important to fill out application paperwork accurately, and provide all requested documents. Saving on the cost of a down payment is a worthwhile investment, since having more money to start out with and just a monthly mortgage loan payment to make is always a good deal to have. So if you find yourself in a position of wanting to buy a home but not having savings or a personal loan from a family member or a friend to use for a down payment, do your best to seek out a no-deposit home loan.

Car title loan basic facts

The massive changes in the economy in the last five years has had a number of effects on average consumers. One of the biggest is the drop in home ownership because of tight consumer credit or because of home foreclosures. Another effect is that homes in many parts of the country dropped in value so much that for many consumers, they owe more than the house is worth, and have no equity in their home.

For many in the US, their home was the most valuable financial asset they had, and in many cases, the only significant one. In fact, the 2012 Statistical abstract of the United States stated that in 2007, just before the start of the most recent US recession, the average net worth of families that owned their home was about $230,000, but for renters, it was about $5,000. Since then, the situation has become worse for everyone, especially for those who don’t own their home.

Because of lower rates of home ownership and the decline in home values, home equity loans are no longer an option for many consumers. For those who don’t own their home, often the only asset they have is their automobile. The consumer financial services industry understands this, and has increasingly provided an additional option for consumer, a loan on the value of their automobile. Also called a car title loan, this is a loan where in exchange for the title to your car (and the right to repossess that car), you can get a short-term loan.

The biggest drawback of these loans is the huge interest rates you may have to pay. While a home equity line of credit may have less than a 10% interest rate, and a credit card upwards of 25%, many car title loans may have effective interest rates of 300% or more.

If you are in a position where you need money and have no other options, then go get a auto title loan chicago or from some other local vendor. But if you do, be aware that it could cost you more than you expect.

Variable rate financing in real estate investing

When it comes to real estate investing, the investor usually has one of two primary goals, obtaining ongoing cash flow or getting either a short-term or long term capital gain. First, some basic definitions:

Capital Gains – If you invest for capital gains, your goal is to sell something for more than you bought it after that asset has appreciated. In order to receive the gain, you typically no longer own or control the asset.

Cash Flow – If you are a cash flow investor, your goal is to receive a series of cash payments from your investment, typically monthly or quarterly rental payments, while you own or control the asset.

There are of couse other considerations for real estate investing, primarily depreciation and tax advantages, that go into a decision to buy, sell, or hold an asset such as a residential or commercial real estate property. No matter what your goals, unless you are financing the purchase with existing assets, you will have to consider the role that your loan or mortgage will play.

If you’ve ever taken out a loan, owned a credit card, or have a mortgage for your house, you are probably quite familiar with the various interest rate options you may have. Investors are typically more sophisticated than buyers who are only looking for a place to live in rather than an investment property, and this could give the investor certain advantages. For example, if you have an investment that was financed at a fixed rate, and you are in a position to sell to a buyer who is unable to find a reasonable rate loan, if your fixed rate were low enough, you could offer a variable rate that would ensure a larger cash flow to you in the future.

To get an idea of what the situation may be like for someone who is considering purchasing a single family residential property that you own, you may want to visit a bank site to see what a Standard Variable Rate may be for your buyer.

If you know what kind of options your buyer has, and what your options are for offering alternative financing options, you could put yourself in a better position to profit over the long term.

Managing debt by expanding your assets

Previous articles have discussed various aspects of debt management, including changing one’s approach to debt. Those changes can included reducing the total amount of debt, reducing the number of debts, looking at different financing options, and understanding the difference between a positive debt that leads to long term positive financial results, and negative debt that only produces expensed and creates no benefits.

One of the golden rules of debt is related to the last distinction of a positive or a negative debt. A positive debt incudes debt that is finances an asset that produces income that exceeds the costs of debt service and the other costs associated with that asset. An investment in an apartment building that produces a positive cash flow each month is an example of a positive debt.

Another kind of positive debt would include an educational loan that allows someone to find employment that produces a higher income, even after taking the educational debt payment into account. These very same debts could become a negative debt if the investment has a negative cash flow or if the educational loan doesn’t lead to a job or a pay raise.

While managing or reducing debt can be a primary financial goal, sustainable financial stability is much more likely to happen when you have assets working for you. Your assets can range from cash in a savings account or other low-risk paper asset, or a business or real estate investment that provides a positive cash flow every month.

If you don’t have any assets at all, it is probably smartest to start with a low risk asset like a savings account or precious metals. If you are going to use some kind of paper asset, it may be best to put it into an account that is not easily accessed to keep you from being tempted to spend it quickly.

Precious metals may fit into this kind of strategy, since you can’t just take a silver bar or a gold coin 1 oz gold american eagle to the store and use it like a common currency. You have to first take it to a coin dealer and exchange it for regular money before you can spend it. Gold and silver have an additional advantage as it can be used as a hedge against currency fluctuations and inflation.

Even if your debts are far larger than your assets, having even a tiny amount of assets to your name could do wonders to make you feel better about your financial situation and your prospects for the future.

Make smarter decisions with home loan calculators

Mortgage payment calculations are based on complex mathematical formulas, and fortunately there are many options for finding calculators to make this mathematical process easy and painless.

By using a mortgage calculator, it becomes very easy to know the monthly payments you need to make, and very easy to see what happens to your payments when you change key values like the amount of the loan, the number of payments, and the interest rate.

Types of mortgage calculators
There are two different types of mortgage calculators, online calculators and traditional physical calculators that have built-in functions for computing principal and interest payments. The online mortgage calculators are mostly used by the borrowers, and real estate and mortgage professionals usually prefer using the physical ones.

You’ll need nothing more than an Internet connection to be able to access the online mortgage calculators. They are available free of cost and are very easy to operate. You’ll just need to put in the necessary information, usually the amount of the loan, the number of payments, and the interest rate.

The most common types of mortgage calculators include the following:

  • Monthly payment calculator – It helps calculate your monthly payments easily and assists you when you’re thinking of taking out loans.
  • Interest only calculator – You’ll know the amount of interest you need to pay every month. The total interest for the term can also be calculated.
  • Amortization schedule calculator – It helps you cut down your loan term by doing calculations on the principal amount and interest rate of your loan.
  • Bi-weekly payment calculator – This calculator uses an accelerated bi-weekly mortgage payment method and helps you save money. Get to know the difference between monthly and bi-weekly payments with the help of this mortgage calculator.
  • Adjustable rate calculator – Say goodbye to uncertainty with this calculator. Know about the changing interest rates and how it is going to affect your mortgage payments.

The benefits of mortgage calculators
Mortgage calculators are beneficial in several ways when you want to refinance mortgage or calculate your debt payments:

  • They let you know about your affordability.
  • They will tell you the time it will take to pay off your loan completely.
  • They will help you learn about other better payment methods.
  • They will let you choose the most cost-effective payment method.
  • They will help you get the most favorable rates on mortgage refinances.

Using a mortgage calculator prior to making any mortgage related decision is important. The calculations give you an idea about the present market conditions and how you can benefit yourself the most.

Manage Liquidity Issues through Online Payday Loans

If you are having trouble meeting some of your financial obligations or are weighed down by an emerging problem in your finances, then you should consider finding a bailout plan that can support your cash position until you receive your next paycheck. Like the US the UK faces some major challenges ahead amid the lingering problems across the region. There’s definitely a great deal of concern amongst the working class, with continuing pressure to earn more amid limited job opportunities. One also has to contend with a tighter credit regime and rising interest rates. Feeling the brunt on both ends of the spectrum, you may need to find a reliable funding support to help make ends meet. Under these prevailing conditions, you may want to look for the best sources for payday loans.

Looking for Instant Cash Solutions?
Financial managers stress the importance of proper use of payday loans. This credit option should only be used during emergencies and short term cash shortfalls. UK working professionals can borrow an amount ranging from £100 to £1000. The funds can be used for many things such as settling bills that are about to become due or to pay for emergency repairs on your car or in your home. This is an ideal alternative to banks and similar lenders. These other loan sources may force you to borrow more than the amount that you need, which translates to higher interest payments, despite the low APR.

Rollovers and Long Term Use of Payday Loans
UK consumers and working professional who observe sound management practices will not have any problem when they avail of this short term funding support. It is clear to them at the very outset that payday loans are meant to be used as short term financial tool. This means that you need to resolve payment issues and concerns before you decide to submit your loan request. There are two things that you must remember when it comes to payday loans. First, unsecured credit option comes with a high APR and it could be disastrous if you use them longer than the recommended period. Second, you must avoid rollovers at all cost as these can drag you into a vicious debt cycle.

Short Term Use of Payday Loans
Payday loans allow you to receive funds right away and use the same to address emergencies and unforeseen expenses. However, you have to borrow only the amount that you require and adjust your budget so you can repay the loan when when it is due. Remember the most important rule of payday loans – pay the loan on time. While some lenders offer the option of term extension, rollovers or even taking out a second loan to pay off the first one can only make matters worse.

Is going to university really worth it?

There used to be a time when getting a degree from most public colleges was very affordable (sometimes with free tuition), and it helped young graduates get access the best paying jobs or professions.

Now, most students have to use one or more student loans to pay their fees, and after all that investment may graduate to a world full of job insecurity and high unemployment rates.

Many people ask the question – is university really worth it? The answer, however, depends on the circumstances of the individual, their aspirations and their access to money.

First, there are some professions where a university degree is essential. In these cases, students have no choice but to undertake further study and many will need one or more loans.

It is not unusual for medical or veterinary students to rack up debts, including student loans, of over one hundred thousand dollars during the course of their university education.

However, the status and potential earnings attached to these professions should mean that the suffering will be worthwhile eventually. In the US, doctors and veterinary surgeons are both highly paid and highly regarded professions.

Other industries also expect an undergraduate degree, such as in the legal profession. Although there are opportunities to access paralegal positions without a degree, to really have the opportunity of a high-flying career, a law degree is essential.

It is not unheard of for law companies and multinational firms in other areas to pay off the loans of graduates when they accept a job with the firm.

This fantastic opportunity only applies to the crème de la crème of candidates, however, so an outstanding academic record and evidence of potential and ambition is also needed.

Students who have difficulty with finance often take part-time work to supplement their income. However, if this is to the detriment of their studies, the end results may be less impressive.

It may be worthwhile to take some time out and build up financial resources before attending university, so that the student does not have to commit time to paid work.

There are numerous jobs, though, which do not require a university education and individuals may be better off by simply gaining work experience while earning a decent wage.

Some of the more manual professionals such as plumbers and electricians can bring significant financial rewards. Students generally gain an apprenticeship and may study at a local college to get the necessary qualifications.

Many highly paid individuals have taken this route through their working life and have built their fortunes and even empires this way, sometimes starting as a plumber, electrician, or carpenter before moving on to lucrative careers as construction managers or real estate developers.

So, university is really worth if for many people but it does depends on the individual’s professional aspirations. It is expensive but it may be essential. However, there are many ways to make a good living and that is only one route. If your talents lie elsewhere, investigate those options, as they may be just as lucrative and rewarding.

How much can you afford to pay for a house?

Today’s housing market may not be going well for those looking to sell, but buyers have an opportunity to find all kinds of deals that make home-ownership affordable. There are several different factors that you should take into consideration when you attempt to make a home purchase.

The House Payment
The amount that you are going to pay every month for your home is the most critical number when it comes to finding out how much you can afford to pay for a house. This number comes from several other figures all working together to give you the monthly payment. As you work with mortgage calculators, take a close look at this figure to determine whether or not home-ownership is a possibility.

The Cost of the House
Whether you have retained the services of a realtor or plan to look around yourself, the overall amount that a home costs will figure into whether or not you can afford it. The more you research, the more you will find that there is a range in price that you can afford.

The Down Payment Amount
Do you have money set aside for a down payment? The down payment will reduce the amount of money that you need to finance for home-ownership. You will need at least a part of the down payment to be used as interest money when you place an offer on a home.

The Loan Terms
Financing a home is a critical part to the ownership process. Think about whether or not you are going to set up a loan for fifteen or thirty years. The payment will be higher with a fifteen year loan, but you will be able to pay it off sooner. Most people choose to finance for thirty years in order to be able to afford a bigger home.

Private Mortgage Insurance
If you don’t have at least twenty percent of the cost of the home as a down payment, you typically need to pay private mortgage insurance. This is something that will be added into your mortgage payment, so be sure to take it into consideration when planning.

Other Loans
Do you have other loans that you are currently paying on? When you decide how much you can afford to pay for a house, you want take into consideration the other amounts that you owe and how much you pay for them each month. Over committing when it comes to a house payment can put you in a difficult situation, so be aware of other expenses.

Projected Utilities
Remember that a home purchase comes with the cost of maintaining the residence. This includes electricity, gas, taxes, homeowner’s association fees and even the cost of garbage collection. Each of these payments needs to be included in how much you can afford when it comes to a home. You don’t want to be able to afford the payment but not be able to live there because of the overall cost of running the home.
Take all of these expenses and numbers into consideration when you begin the search for a home that you can afford. This is usually a lengthy process, but the final results are well worth the effort!

What You Need to Know About PayDay Loans

No matter who you are, if you live in the US you have been exposed to payday loan companies. Either you have used one to get a loan, you know someone who has used one, you have seen one of their offices in your neighborhood, or you have heard about them online, on TV, or on the radio. It isn’t just poor neighborhoods anymore. You can find them in the most exclusive Zip Codes in the country. If you don’t want to walk into one, you don’t have to. Online payday loans make it easy to use one in private if you don’t want your boss (or worse, your employee) walk into one.

Most personal financial advisers would suggest that you don’t use these services, and if you are using them now stop doing so. Why would financial experts recommend this, especially if you don’t have access to traditional loan sources like a credit card, bank, or credit union? If you know more about them, maybe their advice would make more sense.

What Is a PayDay Loan?
A classic payday loan nothing more than a short-term term loan where the company issuing the loan requires that you have a job with a steady paycheck before you get the loan. A payday loan may have other names, like a cash advance loan, check advance loan, post-dated check loan, or a deferred deposit loans.

The names may be different, but they all work in a similar way. The borrower writes a personal check payable to the lender for the loan amount plus any fees. The payday loan company the gives the borrower the loan amount (some may deposit the amount electronically into the borrower’s bank account), and agrees to hold the check until the loan is due, usually the next time the borrower gets paid. The loan (plus the fee) gets paid off after the next payday.

Payday Loans Are Very Expensive
If the loan is extended, or “rolled over,” you may be charged new fees or penalties, making it harder for the borrower to pay it off. How expensive can it get? For example, say you need to borrow $100 for two weeks. You write a personal check for $110, with the $10 being the fee for the loan. The payday lender agrees to hold your check until your next payday. When that day comes around, you either pay it off or rollover the loan until next payday. You may have to pay even more than $10 for this rollover fee. If you roll-over the loan several times, the finance charge might be half or more of your original loan amount.

Payday loans are much more popular with people who can’t get short term credit from their bank or credit union. Not surprisingly, payday loan businesses are much more common than banks or credit unions in poor neighborhoods.

Options to Payday Loan Companies

    Before you take out a payday loan, you should consider one or more of the following options:

  • Banks and Credit Unions: Ask if they have credit options that fit your needs. Even if they said no before, they may say yes now.
  • Community Organizations: A local community-based organization may make small loans to individuals or small businesses.
  • Cash Advances: A cash advance on a credit card or check card (typically an ATM card that can be used like a credit card) also may be possible, but it may have a higher interest rate than a regular bank or credit union loan.
  • Negotiate with Your Creditors: If you see a short term financial problem coming up, contact your creditors or loan servicer as quickly as possible if you are having trouble with your payments, and ask for more time. Many may be willing to work with consumers who they believe are acting in good faith. They may offer an extension on your bills; make sure to find out what the charges would be for that service — a late charge, an additional finance charge, or a higher interest rate.
  • Get Help: Contact your local consumer credit counseling service if you need help working out a debt repayment plan with creditors or developing a budget. Non-profit groups in every state offer credit guidance to consumers for no or low cost. You may want to check with your employer, credit union, or housing authority for no- or low-cost credit counseling programs, too.
  • Plan Your Spending: You can avoid going to a payday loan company if you take the time to understand your own finances. That means understanding how much comes in, how much goes out, and making spending decisions so you will have money left over at the end of the month.
  • Save More: You savings can help you avoid borrowing from a payday loan company in emergencies.

If you have not choice and have to use a payday loan company, borrow only what you can afford to pay with your next paycheck — and make it a goal to survive to the next payday without borrowing any more money.

Faxless Payday Loan: Helping Hand or Quick Sand?

Helping HandWhen we talk about loans in any forms, they are always related to debts.

Taking loans can offer you two things: good debts and bad debts – good debts put money in your pocket, bad debts lose money from your pocket.

Your financial needs, situation and knowledge play important roles in making the loan bad debt or good debt.

Loans come in many flavours – One of the most talk about, in my opinion, is payday loans. Why is that?

Faxless payday loan – offering you financial solution, fast – a bit too fast to handle

Payday loan is a small amount, short-term loan that is intended to cover borrower’s financial need until his/her next paycheck received.

With the advent of the Internet, payday loans are becoming more and more accessible. The term “faxless payday loan” refers to payday loan which application is processed online, thanks to the Internet.

While in essence payday loan aims to help people regardless of their credit score, many accuse payday loan as the culprit that drown many people deeper in debt.

Not quite.

In my opinion, people inherit a common weakness. They want more for less, and they want it fast.

People are always looking for fast and instant remedies for their problems, including financial problems. Just like everything in life, such as fast food, instant means immediate gratification first and quality second.

Payday loan offers fast solution. Faxless payday loan even does things faster, due to online application processing and instant approval. The drawback, as always, is the sky-high interest rate.

Those bring interesting relationship: No matter how negative the reputation of payday loan is, it seems that more and more people need payday loan these days, and payday loan providers are thriving these days. Some sort of love-hate relationship between lenders and borrowers.

Reality check: Stop blaming payday loans – have you ever look things from the eye of payday loan providers?

I am appalled to know people are blaming payday loan. Although I’m not offering any payday loans or similar things and not involving in one either, I think there are too much bad apples thrown at lenders, accusing them as scammers.

Have you ever thought that it is borrower’s responsibility to keep him/her-self well-informed regarding what type of loans he/she is about to take? It is borrower’s responsibility to know what question to ask and when to take payday loans.

Many payday loan providers I know are trying hard to offer a solution. They bear huge risks – they lend to borrowers with no regard of their credit scores. That is why payday loans charge huge interest rate: to supplement the high risks of lending to borrowers with bad credit ratings.

The right borrowers do regard payday loans as the life-savers. do help people – the right one and the well-informed one, that is – getting out of debt.

How to use payday loan to your benefit

First thing first – learn everything you can about payday loan. It is your responsibility to learn about payday loan, about the providers, and about what to expect and when.

Always plan everything – You need to know how much will you get from the lenders, the amount of the interest you owe to the lenders, and most importantly, how the short-term loans can help you getting out of debt, and for how long. You can actually ask the payday loan providers to provide you with a calculation on how much would you pay in the end of the loan period.

If the plan looks positive, go for it. If not, run away from it.

One, last advice: Never, ever take any form of loans without the right knowledge about the loans. That only makes payday loan quick sand, not helping hands.

Image by toolfan.hess.