Accessing sufficient funding is a challenge to many people starting up a small business. Without a history of profitability, it can be difficult to secure a traditional business loan from a bank. But you are not limited to using business loans to gain the start-up capital that you need; tapping into your home equity is another valid option.

You can obtain seed money for starting your small business through a Home Equity Loan (HEL), in which you borrow money from the equity that is built in your home. Depending on your credit history, Home Equity Loans can have appealing interest rates, and interest may be tax deductible; for details, check with a certified tax accountant.

America’s Lending Partners helps make the process of accessing your home’s stored-up equity easier. After completing simple form, up to four lenders will present their competitive offers for you to compare and choose the best loan to help you reach your financial goals.

By Andrea Carangelo

If you are thinking about refinancing a loan or requesting your private mortgage insurance (PMI) be removed, you should know your loan to value ratio.

It is easy to figure out using these steps:

If you will be applying for a loan:

1) Start with the purchase price of the property as the value for the property. (example: $150,000)

2) Subtract the amount of your down payment ($20,000).

3) Take the loan amount which will be the purchase price minus the down payment ($130,000)

4) Divide loan amount ($130,000) by the purchase price ($150,000=value). It would look like this: $130,000 divided by $150,000, which equals 0.87, or 87 percent=your ratio.

5) Use this number with your lender when referring to your loan.

Most loans with an LTV over 80 percent require PMI.

If You Already Have a Loan:

1) You should get an appraisal of your property. This is the only way to get an accurate assessment of its value. If you are just doing this so you are aware of your loan to value ratio, you can save the appraisal fee and estimate the value by comparing your property to similar homes in your neighborhood that have sold. This will be the value number for the equation

2) Look on your most recent loan statement to find out how much you owe (your balance). This will be the loan number for the equation.

3) Divide the loan figure by the value figure. This is your ratio.

If you are requesting the removal of PMI, you will have to get an appraisal. In removing PMI, you may request in writing to your current lender that the PMI be removed if the ratio is 80 percent or less. If you request an appraisal and the value is not high enough, you will still pay for the appraisal.

When you apply for a loan, mortgage loan or any other type of credit, Lenders use your debt to income ratio (how much you owe on credit cards and loans compared to how much you earn) to help evaluate your credit.

How You Can Figure Your Debt To Income Ratio:

1) Add up your total net monthly income. This includes your monthly wages and any overtime, commissions or bonuses that are guaranteed; plus alimony payments received, if applicable. If your income varies, figure the monthly average for the past two years. Include any money earned from any other additional income.

2) Add up your monthly debt. This includes all of your credit card bills, loan and mortgage payments. If you rent, be sure to include your rent payments.

3) Divide your total monthly debt by your total monthly income. This is your total debt to income ratio.

4) If your ratio is higher than 0.36, which professionals would call a score of 36. The lower the better. If the score is higher than 36 it might cause an increase in the interest rate or the down payment on a loan you apply for.

Remember:

When you total your monthly debts, use the minimum payment on your statements.
When calculating your income, a lender usually only considers money from a job that you have been at for at least two years.
Unreported earned income cannot be used in the calculation.

AC Associates helping individuals across the United States reach their financial goals. We offer a program to Home Owners on how to successfully sell their home by offering Owner Financing. Purchaser of Owner Financed Mortgage Notes, Deeds of Trust, Lawsuit Settlements, Life Insurance, Lottery/Contest Winnings and Seller Financed Business Notes.
http://www.acassociatesusa.com

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America’s leading financial services provider, mortgage and loan specialist Countrywide Financial has recently announced an aggressive recruiting campaign for mortgage professionals, including prime and non-prime sales professionals.

According to a press release Countrywide plans to participate in local job fairs and real estate related events throughout the entire US. Variety of regional activities are scheduled in Arizona, California, Texas, Florida, the northeast corridor with a concentration in metropolitan areas.

Countrywide Financial Corporation, founded in 1969, is a diversified financial services firm primarily focused on real estate finance.

For more information about their recruiting campaign visit:

Countrywide Ramps Up Recruiting of Mortgage Professionals

Peak Home Loans announcing a limited time home refinance loan program for the people with less-than-perfect credit, listed 5 most common mistake people make when they refinance their homes:

1. Choosing a home loan lender for the wrong reason (i.e., the lowest rate, your existing lender.) People choose home loan lenders for all the wrong reasons. Getting a low rate is important, but it’s not the only consideration. Lenders may offer the lowest rate but charge extra fees (loan fees, origination fees, copy fees) so that in the end you’ll pay more for the refinanced home loan even though your rate may be lower. The only way to protect yourself is to wait for the Good-Faith Estimate which should list all the closing costs. Compare the Good-Faith Estimates from a number of home loan lenders. But comparing Good-Faith Estimates is not the only story when you want to refinance your home. If time is important, you want to choose a mortgage company that is capable of acting quickly. Ask each company to give you their average closing time for loans similar to yours. Ask around among your trusted friends. Find out who refinanced lately and ask them what they thought of the company. Don’t assume that your existing home loan lender is any better than a new lender. Since most home loans are sold in the secondary market, everyone has to meet certain criteria, and your existing lender will probably require the same documentation as a new lender. However, once you have a commitment from a new lender, it doesn’t hurt to ask your existing lender to beat it. Often times they will.
2. Not getting everything in writing about refinancing your home loan. Get everything in writing. No matter what the Loan Officer tells you, ask him to confirm it in writing. Don’t believe someone when they tell you that your refinance rate is guaranteed. Get it in writing.
3. Not knowing the appraised value of your home. Many people go ahead and try to refinance their home without knowing the true value. There are many places you can get an estimate of the true value of your home for purposes of refinancing. Many Realtor sites have home value estimators on their site. For the price of listening to a mortgage company try to sell you a mortgage, you can get an approximate value for your home. Check the recent sales in your neighborhood and try to find a comparable house in a comparable location. Or you can ask the appraiser to do a drive by and give you a verbal estimate of the value of your home. If it’s in the right ballpark, you can order a thorough appraisal. Know the value of your home before you seek to refinance your home loan.
4. Not doing the math when refinancing your home loan. Do the math. Refinancing your home has a cost. You need to see what the cost is, and then determine how long you are going to stay in your home. For example, if you are going to stay in your home for 5 more years, and the cost of refinancing your home is $5000, you need to save at least $1000 a year in order for the deal to make sense. If you only save $50 a month as a result of refinancing (that’s $600 a year), you’ll be loosing money.
5. Not considering a 2nd Mortgage. When you refinance your home, you are refinancing the total amount. Suppose you have a home that is now worth $400,000, and you only owe $250,000 on the home and you want to take out $50,000. If you refinance and take out $50,000 in cash your new loan may be for $310,000, ($250,000 owed + $50,000 cash out + a total refinance cost of 3% or $10,000). It may be better to take out a 2nd mortgage for $50,000 and pay a slightly higher interest rate and slightly higher points, but only have a basis of $50,000 instead of the $310,000.

Have you ever made these mistakes?

By Charles Essmeier

Home prices have reached record levels, and in many parts of the country, homes have become nearly unaffordable. Real estate has replaced the tech stocks of the late 1990’s as the hot investment, and everyone has sold their stocks and jumped into investment property. Real estate prices have increased at a far greater rate than salaries, and the lending industry has attempted to solve this problem by introducing a tremendous number of mortgage options for borrowers who barely capable of purchasing a home. Most of these loan types feature adjustable interest rates and minimum down payments. One of these, the option ARM, is the most dangerous type of loan ever introduced. Borrowers who are considering an option ARM should be aware that this loan could leave them with a loan that is worth far more than the home it’s used to buy and with a loan that he or she cannot afford to pay. The option ARM is not for the squeamish.

So what, exactly, is an option ARM? An option ARM is a mortgage with an adjustable interest rate that typically gives the borrower four different payment choices each month. The first choice is based on a 30-year amortization table; the second on a 15-year amortization table. These would correspond to payments for adjustable-rate 30 and 15 year mortgages, respectively. The third choice is an interest-only payment, which pays the interest that accrues during the month but pays nothing towards reducing the loan amount. The fourth choice, the one that makes this loan so dangerous, is called the “minimum payment.” The minimum payment is calculated upon the first month’s interest rate, which is usually a very low “teaser” rate that can be as low as 1-2%. Most borrowers with an option ARM opt to pay the minimum payment each month, and that’s where the trouble comes in.

The loan carries and adjustable interest rate, and this rate can adjust as often as every month. If the borrower is paying only the minimum payment, then he or she isn’t even paying enough to cover that month’s interest on the loan. What happens then? The unpaid interest that has accrued is added to the loan principal. The principal can actually grow larger, and as interest due is calculated on the loan principal, the interest due will increase, as well. Interest rates are currently near all-time lows and are sure to increase. A buyer who continues to make minimum payments on an option ARM will find that the principal on the loan is actually increasing over time! This is known as negative amortization.

In a negative amortization situation, only bad things can happen. The lender can require refinancing under certain conditions stated in the loan agreement. The buyer may find himself unable to pay the loan and may have to default. And the lender could find himself holding a note that is worth far more than the house that it represents.

The option ARM is a loan that is best suited to investors and homeowners who only intend to keep the home for a short time. It is not a good choice for anyone who may be using it to buy more home than he or she can afford. Unfortunately, that describes a lot of buyers who are taking out this type of loan. Anyone who is considering a home purchase should be very careful if this type of loan is offered, as it could leave you both bankrupt and homeless.

©Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to personal bankruptcy, debt consolidation and credit counseling, and HomeEquityHelp.com, a site devoted to information regarding mortgages and home equity loans.

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