You already know the importance of maintaining consistent cash flow. Did you know that your business’s assets can be the solution?
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Loan
Businesses need capital if they are to grow, and sometimes need finance solutions to raise capital. If you are unable to raise capital through a loan, equity may be an alternative solution.
A dramatic increase in the number of lenders has highlighted the need for greater research and consideration, or ‘due diligence’, when searching and applying for a loan.
In this article written for Your Mortgage Australia, Gerv Tacadena explains how technology is changing the game for many industries, including the home-lending space, where digital mortgage providers are starting to ramp the competition up with brick-and-mortar banks…
Dubbed as the ‘Layby’ of today, Buy Now Pay Later providers can send the wrong message to your bank and potentially affect your loan application.
When it comes to saving on your mortgage, some of you may not have to look further than your job. If yours is a profession that classifies you as a ‘low risk’ borrower in the eyes of lenders, then you may be entitled to special discounts.
If you are thinking of building your own home, you will need to be familiar with the ins and outs of construction loans.
Before you apply for a home loan with your partner, there are a few discussions that you need to have that go a little beyond what you may know already.
It’s easy to get carried away with the fun part of buying a property – looking at houses – but delaying the less compelling task of arranging finance will weaken your negotiating position on both the property and the loan.
Exit and early termination fees can put the brakes on plans to sell, to refinance, and to renovate or purchase an investment property. Here’s how to avoid them from the start.
For the best possible chance of getting the loan that suits your circumstances, you need to tick all the boxes. If an application is not completed correctly, you risk delays in approval, or even being declined by potential lenders.
While SMEs account for 97 per cent of Australian businesses, it can still be difficult to make a case to a bank when looking for finance to start a new business or invest in the growth of an existing one. The good news is that applying for commercial finance through a bank is far from the only option.
If you’re looking for a home loan but are inexperienced with finance brokers, attending your first appointment with a broker can be a nervous experience.
Stamp duty is a charge which is applied by state governments in Australia on transactions relating to the transfer of land or property. It is paid upfront and needs to be budgeted for in addition to your loan deposit.
From time to time, a business needs a cash injection. With so many lenders offering a dizzying array of products, it can be difficult to know what to choose.
Paying off a mortgage can seem relentless – every payment counts of course, but it can seem to be taking forever to make a dent. Here are some simple ways you can increase the amount you pay off and own your home sooner.
It’s easy to understand why we look for the largest, most prestigious properties we can afford – we are constantly urged to define our success by our possessions: bigger, better, newer, faster, shinier. A relatively recent counter-movement, however, urges lower impact, fewer goods and less consumption, and at its core nestles the tiny house.
While you may not need a six-figure salary to invest in property, those who earn a relatively low income will require a little more creative thinking to start a portfolio. Here are some tips to help you get started.
Find an investor-friendly loan
The challenge for low-income earners, explains the finance broker, is the time taken to save for a sufficient deposit. Some lenders require a higher deposit for an investor than is required for an owner-occupier, so seek out a lender and loan that is investor friendly, or consider living in the property for a period after the purchase before converting it into an investment property as your portfolio grows.
In any case, having at least 10 per cent of the property’s purchase price as a deposit will not only increase the likelihood of loan approval, it will also increase your borrowing capacity and lower the risk that you will have to pay lenders’ mortgage insurance (LMI).
Prove your financial discipline
Your lower income on an application can be offset by proving yourself a low risk borrower. Having genuine savings will not only highlight to lenders your ability to consistently meet financial payments and live within your means, it is also an opportunity to increase your borrowing power. The same can be said for lowering any existing debts.
“Keep credit card limits as low as possible as lenders always calculate servicing based on the limit, not the balance,” advises the broker. “Also, try to pay off any personal or car loans before applying for an investment loan. Because of the short-term nature of these commitments, repayments can have a significant impact on an applicant’s borrowing power and should be paid out where possible.”
Choose the right property
When it comes to choosing the property, low-income earners will generally do well to steer clear of anything that’s negatively geared, as you are not trying to offset your high income with losses, and remember the importance of profit over property.
“In my experience, regional areas is where to turn to, as the entry point to the market is lower,” says the finance broker. “Although there will generally be less capital growth, there are higher rental yields on offer.”
Seek out different strategies
For those who don’t have other non-deductible debt they want to pay down first, adopting a principle and interest payment is the obvious choice, advises the finance broker. Interest-only loans are only suitable in specific circumstances when strong exit plans are in place, while principle and interest payments reduce debt, freeing up borrowing capacity and allowing the borrower to leverage equity.
Investing with a close friend or relative is another way to enter the market for those who earn a low income. As long as agreements are in place, including who is responsible for the mortgage and what happens if one owner defaults, how the property will be used, in what circumstances it may be sold, and how maintenance will be paid for, co-ownership is preferable not owning a property at all.
Find the right loan
Recent research suggests that as many as 60 per cent of applicants who are rejected by the major banks would be eligible for a loan through a specialist lender. Specialist or non-conforming loans do carry higher interest as a rule, to account for the higher perceived risk the lender is taking, but a good finance broker will see this type of loan as a stepping-stone to a prime loan, and help their client prove themselves so that they can switch to a prime loan after a year or so.
Property investment may not be as straightforward to low-income earners, but in most cases is accessible, provided the right properties and finance products are sought out. For further insight, contact Skybridge Capital on 9221 4888.