Tag Archives: Finance

Is it Hard to Secure a Construction Loan?

Money, calculator and contract focused with house blurred backgroundIf you value customization over convenience, building your home from the ground up is better than buying an already existing one. New home construction projects are actually not uncommon in the North Star State. Despite the additional costs, many homeowners choose to build instead of buying to bring the home up to code successfully. Like a blank canvas, a vacant piece of land offers countless design possibilities.

The only challenge to those who tackle new home construction in Lakeville, MN, and nearby areas are obtaining a favorable mortgage to fund your project. Here’s why it can be hard to secure a construction loan:

Stakes Are Extraordinarily High

Most lenders are reluctant to loan a considerable sum of money for a property that doesn’t exist yet. The construction process is full of uncertainty, making it an extremely risky endeavor. If things don’t go as planned, the lender might find it difficult to recoup the money even if the piece of real estate is used as a collateral. In the end, absorbing significant financial losses is highly probable.

Strong Lender Relationship Is Important

Considering most lenders don’t aggressively market high-risk construction loans, the ones that are likely to provide you with the funding are those that are already known to you. Talk to financial institutions, such as banks and credit unions, which you’ve already established relationships with. Not only they increase your chances of approval, they are likely to offer lower interest rates as well.

Large Down Payment Is Necessary

Even if you manage you find a willing lender, don’t expect the mortgage to finance the entirety of your project. To reduce the risk of your new home construction project, the lender may only offer to cover 80% of the expenses — or even less. Be ready to put down at least 20% of the project’s overall cost to get it off the ground.

Don’t let the scarcity of construction loan providers discourage you from realizing your goal of building your dream home from scratch. Take your time to explore the available financial products and study your options to identify the most favorable ones.

How Business Owners Can Save on Overhead Costs

A money box and electronic calculatorAs a business owner, you should always find ways to reduce your overhead costs without sacrificing the quality and value of your services or products. There are ways to reduce your operating expenses while maintaining every aspect of your company that keeps customers happy.

Consider a Modern Workspace

If you operate a smaller business, consider the benefits of a modern workspace. A virtual workspace allows you numerous modern benefits, including a reputable address and phone number, and even a secretary who will answer customer calls for you.

Contact a company that offers virtual office franchise services in your area for assistance, such as Venture X.

Sublet Your Extra Space

If you have extra office space that goes unused, it is a waste of resources. Unfortunately, many new startup companies find themselves locked into 3 or even 5-year lease terms, making it impossible to move on and find a space that is better suited to their needs.

Fortunately, you can reduce overhead costs and wasted space by subletting the unused office space.

Switch to Electronic Paperwork

It costs money to store paper files. Paperwork takes up space in your office, and you lose time and money when you have to dig through stacks of paper to find what you need. Rather than investing in a space with a storage space or digging through files, switch to electronic paperwork.

Aside from reducing overhead costs, you will also save at least a few trees.

Control Purchases You Make

Another way to reduce overhead costs is to reduce the purchases you make. Evaluate every purchase made to determine if it is necessary. If you find that it is something you can go without, skip it. Also, look into alternatives to what you want to buy to see if there is a cheaper option.

Controlling your purchases can save you money and reduce overhead costs greatly.

You will find that once you reduce your overhead costs, your profitability will increase. You need to improve your profitability to succeed as a business owner in this day and age.

More than the Loan Itself: Deconstructing the Parts of the Cost of Borrowing

LoanDealing with debt, especially loans, is one of the most confusing things possible. Yes, the offer sounds perfect for your needs and not to mention the sweet price. But, as you go on paying the loan, the rate consistently changes. So, is this mistake on the part of the lender? Well, probably not.

Rapid Loans explains that borrowing money isn’t all about who offers the lowest interest rate because that’s just part of the overall cost. There are actually a lot of other payables if you carefully examine the details of the loan contract. That’s why it’s best to know the real cost of borrowing or making a loan first before committing to one.

The Compounding Parts of a Loan

Other than the interest rate you pay monthly, other factors add up. The actual cost of borrowing includes the following:

  • The Loan Baseline – depending on how high or low your loan is, there’s always a standard or flat rate. So, if you borrowed a below average value, you’re likely to pay the same rate with standard loan amounts.
  • The Loan Duration – the longer the repayment period, the higher additional payments you’re likely to pay.
  • The Repayment Mode – the standard mode of payment is monthly, which is an exact all-year round guarantee. But, there’s also the bi-monthly payment where you only have to pay 24 times a year.
  • The Type of Interest Charge – most loans have the Annual Percentage Rate (APR), which includes the total arrangement fees and charges. Always look at the APR to gauge the whole of your loan correctly.
  • The Transaction Fees – late payment fees, default charges, and other miscellaneous fees are always present in loan repayment. Remember to take them into account.

Some lender will have different structures that you should pay attention to. But as a standard way of making any loans, don’t focus only on low-interest rates.

Keep Track of Price Changes

Lessen Your Financial Woes

Keep Track of Price ChangesYou’ve probably heard countless times how you should always keep a budget, plan your expenditure, save and avoid impulse buying so as to avoid financial woes. True, these are quite the essentials.

Nonetheless, here are a few issues that make a big difference yet they’re often overlooked.

Keep Track of Price Changes

Prices in today’s markets change every other day. Keep track of the commodities you purchase frequently and those on your short-term and long-term budgets.

Doing this will help you take note of any price differences which will help you take advantage of that discount or holiday cut-offs. If prices go up you can postpone your purchase and save some more or find more affordable places.

One advantage of doing this is that you avoid going off budget and creating unnecessary financial emergencies because of over-spending.

Solve Problems as Soon as possible

Ever realised how a small unresolved problem can lead to multiple problems or one big problem that sets you off balance? In most cases, the problem is not keeping track of your finances, but having one too many emergencies that always throw your budget off-track.

Realise that, often, emergencies occur because of that missed deadline, the leak you ignored, procrastination, basically a thousand reasons you can’t deal with an issue in good time.

The solution to this problem is to create a to-do list, and a to-do later list. List down the things that have to be done sooner or later and make sure you set timelines for each task.

Utilise the Instant Personal Loan

For most people the word loan sends a shiver down the spine. Especially when you think of the high interest rates most loans carry with them. However, with instant personal loans, says rapidloans.com.au, there is not much for you to worry about.

True, there are those emergencies that are not self-imposed. Instead of struggling so much, why not take an instant personal loan. This type of loan attracts minimum interest rates, often requires no collateral and has friendly repayment terms.

Do not spend sleepless nights because of that financial hitch; deal with the issue at hand lest it graduates to a bigger, self-imposed emergency!