Get the Best Mortgage Rate at the Lowest Cost

AbbeyFor some folks getting a mortgage can be a daunting task. Especially for first time home buyers. This short tutorial and guide will make it easy for first time home buyers and those new to mortgages to understand what is a mortgage and how to obtain one at the best cost and rate.

A mortgage is simply a loan that the bank provides you with that you have to pay back over a certain amount of years agreed on by both parties.

There are many types of mortgages available, however with this tutorial we will be going over the 30 year fixed rate mortgage.

List of to-do’s before you contact your bank or mortgage company.

1. Understanding how much you can afford.

Most bank uses a rough formula to figure out how much you can afford, they call this DTI or debt to income ratio. 
For your case your total mortgage expense including taxes and insurance should not be more than 40% of your total gross income.

2. Paperwork

Most banks and brokers, will now require a full documentation of income before they will lend you any money. It simply means your last 2 years of W2s if you’re employed or last 2 years of tax returns and current Profits and loss statement if you’re self employed. Depending on your credit some creditors will also ask for your bank statements. As a safeguard simply provide your loan officer 12 months of your bank statement. The easier you are to work with, the chances are your loan officer will give you a better deal.

3. How to negotiate

There are many ways to negotiate a mortgage. I will provide you a simple clear cut method that I go by. Like you, the person who is doing the loan for you has to make money so asking for a free loan like most “experts” claim will only result in a higher interest rate on your end. So the trick here is to find the balance. As a general rule of thumb I always recommend buyers to pay no more than 1 Point. Other wise known as 1 percent of the total loan balance, borrowed. So for example, if you are taking out a $300,000 mortgage you don’t want to pay more than $3,000 for everything and that includes your title and escrow charges.

So now that you know how much in dollars you want to pay, you can let your loan officer know, and they will give you a rate, now you can compare rates between banks.

When comparing rates make sure you are comparing the same products, some loan officers will show you a different type of mortgage usually an adjustable to show you a more favorable rate or cost.

There you go folks that’s how you get the best mortgage at the lowest cost. You can use this strategy and tailor it to what you feel comfortable with. If you don’t want to pay a single penny for your loan simply tell them, you don’t want to pay anything for the loan, it will result in a higher interest rate. So you be the judge of it.

Have a great one!

How to Find Investors?

AbbeyPeople who are able to come up with a business idea that has potential but lack the financial capital to implement it are often forced to look elsewhere for investors to get the financial backing required to get their business running. The amount of funding required to start the venture determines the finance source most appropriate for you. How much control of your project you are willing to relinquish is also a deciding factor. So the real question is, how to find investors? Let’s try to answer that.

Create a Business Plan

The logical first step for any business project is to develop a detailed and thorough business plan that you can use to show potential investors after you find them. The best way to go about this first step is to get a professional business plan written as it will help you make a good impression and increase your chances of securing funding.

While there is no particular formula that applies to it, business plans usually start with an executive summary that will briefly explain the concept and possible returns from it. This is followed by a lengthier business and product description and a detailed plan describing how the business is going to be managed.

Family and Friends

Many people who are looking for investors often end up going to their friends and family first for investment. This funding is often easier to get, but it may not always be enough or exactly what you need. Most people you’ll be familiar with won’t have millions of dollars to invest in your business, and it might be best to keep such familiar lenders at an arm’s length.

However, if you do end up receiving investment from your friends or family, you should always have a clear agreement in writing so that misunderstandings don’t arise that could affect your relationship with them adversely.

Bank Loans

debt consolidation Toronto OntarioMost entrepreneurs turn to financial institutions such as banks for assistance. However, the problem is that banks are often reluctant to lend money to smaller businesses, especially in times of financial difficulty. A way around this problem is the Small Business Administration, which is a government institution that can help you with that funding you need. It provides qualifying borrowers with a loan guarantee to make them viable for a bank loan.


Angel Investors

This is another popular option that involves entrepreneurs seeking out individuals with high net worth who might be interested in investing. These investors often offer funds in exchange for an equity investment in your new venture, provided they find your proposal worthy of the investment.

Venture Capital Companies

You can always approach venture capital companies for seed capital if you have already exhausted other financial sources and are still short of the funding you need. However, the problem is that most venture capital companies aren’t interested in small loans and want more control over your business. If you do decide to reach out to them, be prepared to offer a position on the board and a considerable percentage of the shares.