If you are looking for a steady income and investment then going into the buy to let could be the answer, however it is by no means a get rich quick venture and it is hard work and costly. There are many factors to take into consideration when it comes to the buying a second property and one of them is second property mortgage finance. Very few of us know much about financing and mortgage and this is where a specialist broker can really make a difference.
The type of second property mortgage finance that you will require will depend on what it is you are buying the property for; if you are going to have it solely for your own benefit then will make a difference to the loan as opposed to letting out the property to others. If you are going to be renting it out to others then this will be classed as a business and so you will need a buy to let mortgage rather than just a second mortgage, again this is where the advice of a specialist broker is needed.
The first thing you will need to take into consideration when it comes to buying the property is how well you know the market, for example do you know all the pros and cons of buying a second property, while there are many good points there is also the downside. Always remember while the buy to let can be a very lucrative business it is also a very risky one if you go into it with little or no knowledge.
The area in which you choose your second property can also make a huge difference when it comes down to getting second property mortgage finance. The lender will of course want to know that the property is in an ideal location especially if you are going to be renting it out. Whether you are considering letting the property or you are just living in it yourself then you will want to take into account such things as amenities and transport etc.
Also do through research in the area and look at the average cost of property and what you could expect to draw in for renting. If your broker is looking for a buy to let mortgage for you then the lender will usually ask that the rent you will bring in will cover around 130% of the mortgage. Going with a specialist broker is the only way to get the best deal when it comes to second property mortgage finance.
Ultimately, when we decide to take out a loan, we want to try to ensure that the loan we agree to represents the best value.
Too often, many of us simply look at the APR as the determining factor and people have often been lured into the dangerous mindset of believing that if a lender’s APR is the lowest around, then it must offer good value but, sadly, that isn’t necessarily the case.
The APR rate can initially be a good guide to begin your research but there are many other important factors to also take into equal consideration. What about fluctuations in the Bank of England’s interest rate? If you have a loan with a variable APR and interest rates rise, then so, too, will the cost of your loan repayments over another loan which has a fixed rate of interest for the duration of the loan term, even if the latter had a lower APR when you were considering your choices.
What about additional or ‘hidden’ charges? Some loans may look very attractive and represent the best value but have you made sure you haven’t overlooked any additional costs you might incur? These can include payment protection insurance, arrangement fees and other charges such as an early resettlement fee.
Then there’s the APR itself. You might have seen a lender offering a loan with a ‘typical’ APR rate of 7.9%, for example. Sounds good on paper but do you definitely qualify for that rate? Around a third of all loan applicants with any given choice of lender will not qualify for the typical rate and so may end up paying far more than if they’d opted to take out a loan with a lender with a slightly higher APR but one which they did qualify for.
When trying to work out which loan represents the best value, the important thing to consider is to ask yourself all of the above questions and build up an accurate picture of the TOTAL amount you’d have to repay from the start date to the completion date of the loan. Only by tallying up all of these figures from each of the lenders can you truly determine which loan represents the best value.
A home is more than an investment, it is an asset. The equity that builds up in a home is something that can prove to be very useful. Additionally, home improvements can really help to build equity. Most people seek out a home improvement loan to make improvements to their home to make it look better or improve upon it so they gain more equity. The most common source for these loans is a home equity loan.
Home improvement loans are looked upon very favorably by lenders. They like that a home owner is building equity in their home and they are often very willing to extend them credit. Home improvements are going to add value to the property, which is an asset for the lender as well. So, it is a win-win situation for both parties.
Getting a home improvement loan is a matter of having the equity on your home. To determine the equity you should get an appraisal. The equity will be the difference between what you owe on the mortgage and the amount the house was appraised for. You can borrow from that amount what you need for improvements.
When you go to get a home improvement loan it is helpful to have the information handy about what improvements you are going to do. Being able to completely explain what you will do with the money can be very helpful in getting the loan approved for the amount you want.
As with any loan, you will need to watch the interest rates and ensure you are not being charged too much. Remember this loan is in addition to the loan you are already paying for your home. With this loan, like with your mortgage, should you default your home is at risk.
Your home improvement loan can be gotten from your current lender or you can shop around for better rates. It is probably best to start with your current lender since you already have a relationship with them and they are most likely to give you a quick approval. It is wise though to at least look at competitors to make sure you get the lowest interest rate possible.
You should also try and speak to a number of decent brokers that have a wide range of lenders on their panel. This way they can go into the market and find you the most suitable loan product and best rate. Also if you have a bad credit history or are self employed they will be able to go to specialist lenders that are not directly available to the general public.
Home improvement loans can be used to make almost any improvement to your home. If you need the money to fix up your home or if you are just wanting to make some additions, a home improvement loan can be the answer. Besides helping to build more equity in your home, home improvement can also help to lower your insurance rates, and improve your living conditions. In the long run a home improvement loan can be very beneficial and is a great debt to take on.
If you’re applying for a new home loan, one of the first items a potential lender will request is your permission to perform a credit check. If your credit history is a bit shaky or downright poor, you might consider the so-called no credit check mortgages. While any legitimate lender will require a credit check at some point, there are many who specialize in helping borrowers with bad credit. They have helped people in your situation find the right home loan at an affordable rate.
First, it’s important to understand how your credit score is determined, and how it is used. Typically, the three credit bureaus (TransUnion, Equifax, and Experian) calculate their scores based on a number of key factors including your payment history, the amount of debt you currently owe, the length of time you’ve carried that debt, and the number of new accounts you hold.
Lenders check all three scores and generally work with an average when assessing your loan application. When opting for no credit check mortgages, you can discuss how the lender uses your credit information. Talking to a loan officer early in the process can save you time, money, and frustration.
The longer your good credit history, the higher your score. The higher your score, the less risk you represent to a potential lender. In general, credit scores range from 340 to 850. Borrowers with higher scores (700+) tend to receive more favorable interest rates. Don’t be discouraged if your credit score is not high, however, because today’s lenders provide a wide range of loan products, including no credit check mortgages.
Although these lenders still require a check of your credit, they will weigh other factors when evaluating your loan application. If you are able to verify your income with a W-2, deposit receipts, or recent pay stubs, and if you can provide sufficient personal references and certain other documentation, you may qualify for one of the no credit check mortgages. You may not enjoy exactly the same loan options as a borrower with excellent credit, but you can qualify for a home loan that will work for you.
Providing mortgages to borrowers with less-than-perfect credit is actually a profitable arrangement, as the lenders stand to profit from working with people who have been turned down elsewhere. And getting matched with lenders who offer no credit check mortgages is easy, if you know where to look. Try online search engines, mortgage brokers, banks and other institutions, and don’t forget personal referrals. Having bad credit won’t necessarily prohibit you from finding a loan.
Remember, once you qualify and close the loan, you have an outstanding opportunity to rebuild any credit problems. Honor the lender’s strict repayment requirements by making your mortgage payments on time, every time.
The cash flow statement sometimes is another financial statement that investors should become familiar with. It is another tool for managers and investors that shows how changes in the balance sheet and income affect cash. The cash flows are broken down into three parts: operating activities, investing activities, financing activities and the cash flows from each source. These changes shown on the cash flow statement are useful in determining the immediate health of the firm and its ability to function as an ongoing concern.
Operating activities are the production, sales, and delivery of the company’s products. These are the regular day to day activities of the firm that put it into business in the first place. This category will include figures like depreciation, taxes, and amortization of intangible assets (things like brand-name recognition).
Investing activities include the purchase and sale of long-term assets. Items here will include capital expenditures and investments. All investments made on behalf of the firm are including here. Purchases of plant, property and equipment are included as capital expenditures.
The financing activities represent the equity of the firm. This is the money owned by outside entities such as banks and shareholders as well as the payments to these owners of the company (dividends). If the company made any purchases or sales of its own stock, it will be included here.
The cash flow statement will contain a bottom-line, the net increase (or decrease) in cash. If a company is negative in cash, it will have issues paying its short-term debts and have difficulty continuing to do business. That’s not to say it will definitely fail, but will have to find other ways to generate cash to pay its bills. Remember, this statement does not detail income; just how much cash the firm has on hand. A sample cash flow statement is pictured below..
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