How to Pick a Home Finance Loan

When you’re in the market for a home finance loan, you’re likely going to want to find the best interest rate and most flexible repayment terms that you can so that you’ll be able to get the most out of your money.

Finding the right home finance loan for you isn’t always easy, however… sometimes it requires you to put some time aside to search for a variety of different lenders and compare their loan offerings based upon interest rates, loan terms, closing costs, and several other factors.

Home Financing

Once you’ve decided that it’s time to buy a new house, you’re going to need to begin thinking about where to find the best home finance loan for your money. Ideally, you’ll be able to find a lender who isn’t going to charge you too much in interest or fees; unfortunately, there’s no guarantee that the loan you get will be the best loan that you’re eligible for. In order to maximize your chances of getting your best home finance loan, you’re going to need to shop around and compare different lenders.

Searching for Lenders

Begin your search for home finance loan lenders in your local area… check with banks, mortgage lenders, finance companies, and any other lenders that might offer loans for purchasing the house that you want. Request loan quotes that detail the interest rates, loan terms, and any fees associated with the loan, then go online and search for some online mortgage lenders so you can request quotes from them as well. Once you’ve compiled a number of quotes, you should begin sorting them in order of interest rates so that you’ll be able to begin the comparison from there.

Interest Rates

The interest that you’re charged on a home finance loan will likely vary from one lender to the next; though the base rates are set at the national level, the local economy and the lender itself can drastically alter the rates that you receive. Be wary of introductory rates, since the regular rate after the introductory period ends can be much higher than the rates offered by other lenders. Take the time to determine which lenders are offering you the best rates over time, and make note of whether those rates are fixed meaning they won’t change) or variable (meaning that they’ll change in reaction to national rate changes.

Loan Terms

Once you’ve decided which home finance loans offer you the best interest rates, you should begin looking at the other terms of the loan offers just to make sure that you’re not going to get into a loan agreement that isn’t in your best interest. Watch out for loans that require very specific payment arrangements or that have any terms that don’t seem right to you. You should also check to make sure whether or not there is a balloon payment (a payment of the remainder owed on the loan after regular payments have been made for a set number of years) due at the end of the loan.

Closing Costs and Fees

Another consideration that you should have for your home finance loan is the amount of closing costs and other fees that are associated with the loan. Most loans of this type will have some fees associated with them, though some lenders charge more fees than others. Take the time to make sure that you’re not paying more than you have to for your loan.

Common Mistakes to Avoid When Entering Into a Franchise Financing Loan

Many Canadian would be entrepreneurs and business owners find that financing a franchise is often as challenging (if not more so) than the process and work and due diligence in selecting the right business to purchase.

Lets share some hands on, ‘real world’ advice and tips on franchise finance in Canada. Fantasy might often work for you, but NOT in business financing!

Business financing is a challenge on any level, major corporations wrestle with it everyday, and you are wrestling with it as you contemplate your new business venture. Naturally all our comments and advice relate to both a new franchise or your purchase of an existing business that is being sold by a franchisee.

A lot of franchises would do well to understand how the franchise industry is regulated in Canada and what types of disclosure and protection are in place for both you, and, to be fair, the franchisor. Those rights and obligations you have are under something called the ‘Arthur Wishart Act’ if you are in Ontario – other provinces have similar legislation. We strongly recommend that you look at the Act, and quite frankly your lawyer might be the best one to do this.

Clients always ask us what rate they might be expected to pay on a franchise finance loan in Canada. We are very clear on that, and the answer is ‘ it depends ‘! Would a rate in the 5-6% range sound good to you. We certainly think it does given you are a small business and in many cases viewed as a ‘start up ‘, notwithstanding your franchisors depth and reputation. That interest rate is available to you through a loan technically known as the BIL loan, also called the CSBF loan. Lay people call it the government Small Business Loan, and it is categorically the way in which a majority of the franchises in Canada are financed. Speak to trusted, credible an experienced advisor in this area of franchise finance who can successfully complete this financing for you.

Is a BIL franchise loan the only way to finance a franchise? Definitely not, other alternatives include a cash term loan, equipment financing for any hard assets in the business, and the final piece of the puzzle, which is your own owner equity or cash investment into the business. All business is financed by borrowing (debt) plus the owner equity contribution.

Can you get a franchise finance loan without any personal guarantees – the quick tip and answer is ‘ no ‘, we don’t think so, but we also point out to clients the aforementioned BIL loan requires only a 25% personal guarantee.

Clients always ask if a franchise can be financed with no down payment – here’s our quick tip on that – No, absolutely not. Whether you are financing a pizza franchise or building a car mfg plant any lender in North America will look to some owner financial involvement in the project. The balance act becomes how much, as there are pros and cons of putting down too much or too little equity.

Can you purchase a franchise without some thought around a business plan – we don’t think so, and info act the best tip we can give you is to do a business plan, and if you aren’t preparing it personally at least stay involved in the input and the process. It will steer you towards a common sense level of financial success in your business.

Prospective franchisees are always asking if an appraisal is required. Generally it is, but the biggest tip we can give you in this area is that the modest cost of an appraisal can actually be the largest financial benefit to your franchise financing, as it has the ability to increase lender confidence and lower your estimated personal financial commitment to the business.

Franchise finance has many small twists and turns along your process – investigate financing options thoroughly and our tips should help you to minimize personal risk and maximize the financing of your business.

Loans – Getting Yourself a Finance Loan

A lender can give finance loans in the UK as either secured or unsecured for smaller items that you wish to purchase, rather than a home purchase for instance. The current credit crunch experienced by Britons has slowed the demand for finance loans, but if you are capable of securing one due to your high credit standing and your pay history, you’ll find that most lenders are more than willing to work with you.

People receive finance loans for various purposes such as possibly a new car, home improvements, a new caravan, solicitor’s fees, a well-deserved holiday, to pay university or other school fees, or in order to pay off their credit cards or even an overdraft. Once the loan is granted the money will of course be yours to spend as you wish.

You will have to fill out an application which will ask for your full name, address, date of birth, marital status, employment status, gross monthly income, whether you are a homeowner or tenant, how much your house is worth and what is owing on your mortgage.

The next step in obtaining a finance loan is for the loan company or bank to verify the various information you have given them. You should be aware that the loan rates can go up to 29.9% APR. APR stands for Annual Percentage Rate, and it is defined as the equivalent rate of interest when considering any of the added costs for a given loan. Therefore it is a function of the initial loan amount, the applicable interest rate, the total additional costs, and the terms. Also, if you are applying for a finance loan, you’ll find that the debt may be secured on your home, and that home is then subject to being repossessed should you not keep up your payments on your mortgage or any debts that are secured by your home.

Now in an automobile loan, the automobile itself secures the loan whether it’s a new automobile or a refinancing of an existing auto loan. As with the caveat mentioned above, you must keep making payments if you do not wish to be subjected to a repossession of your automobile.

Back when lending was competitive it was much easier to locate a lender willing to take a chance on such an unsecured loan. However, now that we are in a credit crunch, all lenders have made it more difficult to arrange such finance loans. Already made effective October 2008, due to unscrupulous lenders who were in essence credit sharks, the Consumer Credit Act now has been changed to offer more protection to borrowers. The Banking Code Standards Board retains an easily navigable website should you encounter any problems when seeking either a secured or unsecured loan in Great Britain.

Regardless of what type of loan you are trying to secure, know that even though more consumer protections have been added, you still need to do your research to avoid being trapped in a loan that is both unfair and unscrupulous.