Fund – Fuzok Fri, 11 Jun 2021 19:32:48 +0000 en-US hourly 1 Fund – Fuzok 32 32 US farmer of color loan forgiveness program suspended: NPR Fri, 11 Jun 2021 18:17:08 +0000

Handy Kennedy, founder of AgriUnity Co-op, fed his cows on HK Farms earlier this year in Cobbtown, Georgia. The AgriUnity Co-operative is a group of black farmers formed to improve their chances of economic success.

Michael M. Santiago / Getty Images

hide caption

toggle legend

Michael M. Santiago / Getty Images

Handy Kennedy, founder of AgriUnity Co-op, fed his cows on HK Farms earlier this year in Cobbtown, Georgia. The AgriUnity Co-operative is a group of black farmers formed to improve their chances of economic success.

Michael M. Santiago / Getty Images

A new federal program created by the Biden administration to reverse years of economic discrimination against American farmers of color has been halted.

A Wisconsin federal judge on Thursday ordered the U.S. Department of Agriculture to stop forgiving breed-based loans as part of a new effort included in the U.S. relief plan.

The move was a blow to the nascent USDA program, but a victory for the conservative law firm behind the case and the 12 white farmers it represents, who say they are ineligible for the case. ‘debt cancellation because of their race.

“The government has created a program that distributes government benefits based solely on the breed of the farmer, and the Supreme Court’s case law is very clear, the government cannot do this without a very good reason,” Luke Berg , Deputy Legal Advisor of the Wisconsin Institute. for Law & Liberty, NPR said.

“The government has not identified such a reason. It has only mentioned societal discrimination, systemic discrimination, but the courts are clear that this is not enough,” he added.

The news was first reported by the Milwaukee Journal Sentinel.

U.S. District Court Judge William C. Griesbach for the Eastern District of Wisconsin, who issued the temporary restraining order, said in his opinion that Congress cannot create a program that discriminates on the basis of race and that the USDA provided no evidence that it was attempting to correct a specific act of discrimination.

“The obvious response to a government agency that claims it continues to discriminate against farmers on the basis of race or national origin is to order it to stop: not to order it to intentionally discriminate against others. on the basis of their race and national origin, ” Griesbach wrote.

A USDA spokesperson said the department would be ready to resume the loan cancellation program if and when the prohibition order was lifted. “We respectfully disagree with this temporary ordinance and the USDA will continue to vigorously defend our ability to carry out this law of Congress and provide debt relief to socially disadvantaged borrowers,” the spokesperson said.

A story of discrimination against farmers of color

The USDA has a history of discriminating against black farmers and other farmers of color for decades – a story that senior department officials now recognize.

“The point is that there was discrimination in the 1970s and 1980s and in the 1990s at USDA which made it very difficult for socially disadvantaged producers to fully and completely access USDA programs,” Agriculture Secretary Tom Vilsack told NPR March.

“The result, of course, is that over time they fall further and further behind,” he added.

The racial divide between farmers who receive federal aid and those who do not was evident as recently as last year, according to Vilsack.

USDA distributed tens of billions of dollars to farmers affected by COVID-19 in 2020, but only 1% of aid went to what the ministry calls “socially disadvantaged producers” – a catch-all term for farmers of color.

The government’s current pattern of discrimination against farmers of color has sparked skepticism among some producers and ranchers, who say they are still unsure whether the USDA will keep its most recent promise.

“If you’re going to put your hand in a hole and a rattlesnake bites it the first time, then you go back there a second time, it bites you the second time, what do you think you’re doing the third time? ? ” Georgian farmer Lucious Abrams said at a recent event, as NPR reported earlier this month. Abrams took the USDA to court over loan discrimination.

What the Biden program does

the new debt relief program is open to farmers who are Black, Hispanic or Latino, Asian, Native American, Native Alaskan or Hawaiian, or Pacific Islander.

The federal government will pay up to 120% of the total amount eligible farmers have on Direct and Guaranteed Farm Service Agency (FSA) farm loans and farm storage facility loans (FSFL) starting January 1.

What it does not do is include indebted white farmers, including a dozen of 9 states, including Wisconsin, Minnesota and South Dakota, have sued the USDA over the program.

Berg acknowledged that the USDA has a history of discriminating against black farmers and other farmers of color. But he said the discrimination was “decades old at this point” and that Congress had failed to tailor the relief plan in question to the needs of current farmers.

“Instead, he chose to pick certain racial groups and not others for a full forgiveness of the loan and to exclude other racial groups entirely, which is mind-boggling in its scope and clearly unconstitutional,” said Berg.

In a recent event, as reported by NPR, Georgia Senator Raphael Warnock said black farmers’ skepticism of the program was “very understandable.”

“These people have been disappointed time and time again,” he said. “This deep mistrust has been built up over the years. It didn’t happen overnight. It won’t be resolved overnight. But the best thing we can do right now is deliver this . ”

Source link

]]> 0
Schleicher new head of mortgage loans at FCCU | Jefferson County Area Fri, 11 Jun 2021 01:00:00 +0000

WATERTOWN – Fort Community Credit Union (FCCU) announces the hiring of Brian Schleicher as a Mortgage Agent, serving members at its Watertown location.

Schleicher will be responsible for assisting members through various home buying scenarios such as first-time homebuyers mortgages, second home purchases, home or construction loans, equity lines of credit home and mortgage refinances.

As a native of Watertown, Schleicher graduated from Lakeside Lutheran High School in Lake Mills in 2007. From there, he served five years in the Wisconsin National Guard as a health care specialist. He then worked in sales and customer service before entering the credit union industry.

Schleicher has experience in processing and consumer loans and mortgages. Knowing the intricacies of the industry, he will bring useful skills to the FCCU Mortgage Department.

“We are delighted to welcome Brian as the new Mortgage Manager,” said Danielle Frawley, Loan Manager at FCCU. “He brings with him his knowledge and experience as well as a desire to help our members be in a better financial situation, which makes him a great fit for our team.”

Schleicher will make an appointment at the FCCU Watertown branch, located at 633 S. Church St. Additional information can be found by calling (920) 563-7305 or visiting

Source link

]]> 0
Why do insurers refuse mortgages? – Councilor Forbes Thu, 10 Jun 2021 09:00:37 +0000

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

Submitting your first mortgage application or applying for pre-approval for a home loan is just the first step on what can sometimes be a long, winding journey to homeownership.

Once you complete and submit the application, you are now at the mercy of the loan underwriters, who are responsible for digging into all the details of your financial life and home ownership. These underwriters will usually never know or see you in person, but will rely primarily on the documents you submit.

If the mortgage underwriting shows red flags, your application could be rejected. So find out what underwriters are looking for and how you can avoid triggering a rejection.

What does an underwriter do?

A mortgage underwriter is the person responsible for making the final call on your mortgage approval. They assess all of the documents associated with your application and help the lender determine if you qualify for a loan. This includes fetching your credit reports, ordering a home appraisal, verifying your income, employment and assets, and double checking the source of your down payment.

If there are any questions or additional information needed, the underwriter will work with you and your lender to put together everything that will allow you to make a final decision.

How long does the subscription take?

Taking out a loan is usually the longest part of the mortgage process. Typically, it takes about 30 to 45 days from the start of the subscription to the close of the loan. However, this timeline can be affected by a number of factors including the complexity of your financial situation, the need for additional documentation, and the number of loan applications currently on the lender’s base.

Other key factors in selling the home, such as whether the appraisal is too low, whether repairs are needed before closing the sale, or whether sellers need more time before moving to a new home, can also delay mortgage processing.

How often does an insurer refuse a loan?

If you’ve been turned down for a mortgage in the past, don’t feel too bad. It happens quite often. In 2019, about 8% of applications for single family homes built on site were rejected. Keep in mind that after the pandemic, this number may be even higher as many lenders have tightened their qualifying standards.

Whether you’ve been turned down in the past or want to avoid this situation when applying, the key is to understand why an insurer might reject a mortgage application and avoid these issues when you apply.

Reasons for being rejected by an insurer

Here’s a closer look at the most common reasons a loan insurer will reject a mortgage application.

Credit problems

One of the main factors that a mortgage insurer will assess is your credit history and your score. Your creditworthiness determines the extent of risk you pose to potential lenders. A good credit score means you are likely to pay off your loan on time, while a few hits means you could end up missing payments or even default.

This means that your credit score will play an important role in whether or not a mortgage is approved. Although it is possible to qualify for some government guaranteed mortgages with a credit score as low as 500, most conventional lenders require a score of at least 620. However, a score of 740 or higher is preferable and will help you get the lowest score. available interest rate.

Even if your credit score is in good shape, there are some negative events in your credit history that might give the underwriter pause. For example, if you had an account in collection or if you had filed for bankruptcy in the past, the underwriter might not approve the loan.

Also, keep in mind that while your credit was good when you applied for your mortgage, any damage to your score that occurs while you are under underwriting could result in a denial. So make sure you keep track of all your payments and don’t make sudden moves, like applying for a car loan or a new credit card, or closing a credit card until the mortgage is approved.

High debt-to-income ratio

Another important factor that mortgage underwriters take into account is your debt-to-income ratio (DTI). This is a measure of how much of your gross monthly income is spent on debt repayment, expressed as a percentage.

For example, suppose you earn $ 5,000 per month before tax deduction. You have a $ 150 credit card payment, a $ 300 car loan payment, and a $ 550 student loan payment due each month. This would give you a DTI of 20% (total monthly debt of $ 1,000 divided by gross monthly income of $ 5,000).

Most lenders require your DTI to be less than 43% when they include all of your debts, plus the mortgage amount, compared to your monthly gross income. If your debt exceeds that amount, they probably won’t approve you for a mortgage.

Unstable work history

Lenders want to know that you have stable income to fund your mortgage payments. Insurers will therefore dig into your employment history and ensure that you have a reliable job for several months or up to two years, depending on whether you are an employee or self-employed. employee.

Certain situations may result in your mortgage application being rejected, including layoff or recent job changes, especially if you change fields. If you’ve changed jobs recently, it may be helpful to include a letter from your employer confirming your position and salary.

Your sources of income are also important. If a good portion of your income is from commissions, bonuses, or other sources outside of a regular salary, this could signal the underwriter that your income is unstable and may require a longer proof of income period. . It could also result in your mortgage application being denied.

No trace of paper

When it comes to your income, assets and down payment, underwriters expect to see detailed records of where the money is coming from. For example, you will need to provide W-2s from the past two to three years and pay stubs from at least the past 30 days that prove you are employed and verify what you stated in your application.

You will also need statements showing your bank account and your investment balances. If you received some or all of the money for your down payment, you will need a gift letter that explains where the funds are coming from and confirms that it is indeed a gift, and not a loan (which is not allowed).

Low rating

Along with your personal financial situation, insurers will also take a close look at the condition and value of the property you are purchasing. A significant number is the estimated market value of the house. Lenders don’t want you to borrow more than the value of a house; if you have to sell the property at some point, it’s important to have enough money to pay off the mortgage.

This may be acceptable if the assessment is slightly lower than expected. But if the appraised value is much less than what you plan to pay for the property, there’s a good chance your mortgage application will be rejected, or you’ll have to pay the difference out of pocket.

Problems with ownership

If you are looking to buy a home to renovate, keep in mind that some lenders require the property to meet certain standards in order to get financing. Some loans, such as Federal Housing Administration (FHA) loans, come with a set of specific property standards for safety, security, and soundness that must be met to qualify. So if the home inspection report you’re considering comes back with roofing or electrical issues, for example, you could be turned down for a mortgage.

Next steps after a rejection

If you’ve recently gone through the mortgage application process and a loan was turned down, it’s important to know why. Your lender is legally required to explain the reason for the rejection of your loan application, which will be detailed in a disclosure letter. If you don’t understand the reasoning behind the letter, contact your lender for a more in-depth explanation.

Once you understand the reason (s) your request was rejected, you can work to resolve the issue. Here are some steps you can take to remedy common problems:

  • Improve your credit. If you have been turned down for a mortgage because of a low credit score or negative scores on your credit reports, it’s important to clean up your credit before you reapply. Start by checking your credit score and get a free copy of every credit report on Review them for mistakes that could lower your score and dispute any mistakes you find.
  • Pay off certain debts. Spend the next few months paying all of your bills on time (payment history is 35% of your score) and paying off any revolving debt. Once your credit score has returned to the “right” range, it should be easier to get approved.
  • Lower your DTI. Reducing your outstanding balances will not only improve your credit score, but also lower your DTI. Ideally, your monthly DTI should be less than 36% and not more than 43% including the mortgage balance. So if you have credit cards or loans that are consuming too much of your income, try to get rid of those debts before you take out a mortgage.
  • Increase savings. If you were turned down for a mortgage because you didn’t have enough down payment or you didn’t have enough assets to support the loan, it’s important to build up your savings. Having more money in the bank will make you a less risky borrower in the eyes of the underwriter. In addition, you may be eligible for a larger loan and / or a lower rate.
  • Choose another property. If there are issues with the home you intend to buy, such as an inflated sale price or damage that is costly to repair, it may be time to look to another home. It can be hard to let go if you’ve found a property that you really loved, but you’ll likely find yourself better off financially by choosing a home that’s easier to finance.

Source link

]]> 0
Private equity is committed to helping the world. Lenders want proof Wed, 09 Jun 2021 15:42:00 +0000

Words can be cheap in the loan market, now some lenders want to change that.

In recent years, borrowers have been able to obtain a reduction in their interest charges in return for achieving objectives linked to environmental, social and governance (ESG) objectives. This trend was boosted this year by private equity firms seeking a share of the stock.

ESG loan issuance reached $ 87 billion in the first quarter, triple the amount for the same period last year, according to data provider Refinitiv.

As billions pour into the market, some lenders are reluctant to trust borrowers’ word that they are meeting their goals in everything from reducing food waste to promoting more women.

“The burden of proof is going to increase. Be prepared for it,” said Mark Wade, head of sustainability research and management at Allianz Global Investors.

Three industry associations that represent underwriters, law firms and asset managers in Europe, the United States and Asia revised their sustainability lending principles last month.

They now say borrowers need to get an independent external audit of their performance against goals, a change driven primarily by investors buying the loans and lenders arranging them, according to the London-based Loan Market Association.

The change in direction was prompted by developments in the broader lending market, but it coincided with the shift from private equity to sustainability lending.

Under pressure from their investors to show that their leveraged buyouts aren’t just about generating returns, private equity firms, which often use leveraged loans rated below the investment grade to fund acquisitions, were responsible for 95% of ESG-related emissions in Europe. unwanted loan market so far this year, according to financial intelligence provider Reorg Research.

Disclosure has always been a challenge for loan investors and, in particular, creditors of private equity holding companies. Many are private companies, and unlike bonds or stocks, loans are not government securities, so they are not bound by the same disclosure requirements.

“The biggest criticism we hear is the problem of having data to assess the situation,” said Armin Peter, head of sustainable banking and global head of the debt capital markets union at UBS.

Boom in leveraged loans

It is not known at what scale and how quickly the voluntary guidelines will be adopted.

Some market observers expect this to be an evolution, with independent verification of ESG objectives eventually becoming the norm, as is the case in public bond markets.

But in the short term, the strong demand for over-supply leveraged loans, in addition to a booming demand for ESG products, means borrowers often have the edge, allowing them to avoid debt. monitoring by third parties.

ESG-linked leveraged loan issuance this year has increased 14-fold to € 19 billion in May from 2020, according to Reorg.

“The amount of liquidity offered relative to the number of high-quality deployment opportunities influences the conditions to be met,” said Murad Khaled, head of leveraged financial capital markets EMEA at Bank of America, who organized sustainability – loans linked to businesses supported by Carlyle and CVC.

ESG-linked leveraged loans save on the cost of borrowing between 0.05 and 0.15 percentage points if targets are met, while costs similarly increase if the goal is missed, according to Reorg.

Almost two-thirds of transactions do not require a third party to verify that ESG objectives have been met, according to data from Reorg.

Granted, not all targets may need external verification if the data is readily available in a company’s regular disclosures, say investors and bankers.

But even within the private equity industry, the demand for surveillance is increasing.

Four months after the buyout company Carlyle Group negotiated a financial package of CHF 413.5 million ($ 452 million) for its acquisition of the Swiss watch industry supplier Acrotec, it is still negotiating how to show the principal Blackstone lender that it is meeting its sustainable development goals, according to two sources familiar with the matter.

Carlyle has been offered a loan by the lending arm of Blackstone Group Inc (BX.N) in which the interest rate drops if Acrotec meets sustainability goals such as limiting its energy use and recycling .

He also negotiated a revolving facility whose borrowing costs are reduced if the funds are used for a project that has a “measurable environmental benefit”.

Blackstone wants an independent party to verify that Carlyle is achieving his goals, according to a source close to his position. Carlyle, on the other hand, wants the third party to be involved only in setting goals and expects Acrotec management to certify compliance, another close source said.

Carlyle Global Head of Impact Megan Starr said her companies self-reporting on sustainability goals was no different than how they reported other data related to their debt commitments to creditors.

“They have a fiduciary responsibility to make sure the data is accurate,” she said.

Our standards: Thomson Reuters Trust Principles.

Source link

]]> 0
Tampa business owner explains how PPP loan saved her life Wed, 09 Jun 2021 00:10:30 +0000

TAMPA, Fla. (WFLA) – Millions of jobs in Florida have been saved by the Paycheck Protection Program during the pandemic. The program was closed to small business owners in the state on May 31, but it is still having a lasting impact.

Michele Renee is the owner of “The Studio” in Seminole Heights. Eight On Your Side first spoke to her over a year ago when the pandemic began, and her world has been turned upside down.

“I don’t know how I would have lived. I would have sold everything and I returned to Texas with my mother.

Renee said the PPP loan saved her life.

“It tied us up. He made people work, he paid the bills. I mean it was a blessing. It was a blessing Renee said she didn’t think she would get it when we spoke to her in April 2020. “I thought it was a joke. I was like there was no way people would give me money. I didn’t think I was going to get it.

Florida has received more than $ 32 billion from the PPP to distribute to businesses in the Sunshine State. This is the fourth highest amount awarded.

“I know I could have gotten another P3 loan, but I felt like I didn’t want to take too much. I was very grateful for the first PPP loan, ”said Renee.

Renee said she is finally looking forward to the future.

“It is very encouraging that things are getting back to normal. I feel happy and that there is joy and life here.

Source link

]]> 0
CFPB announces proposed settlement of lawsuit alleging short-term loan provider violated UDAAP ban on CFPA under deposit account program – Consumer Protection Tue, 08 Jun 2021 06:05:29 +0000

United States: CFPB announces proposed settlement of lawsuit alleging short-term loan provider violated UDAAP ban on CFPA under deposit account program

To print this article, simply register or connect to

CFPB announced last week that he entered into a proposed settlement with Driver Loan, LLC (“Driver Loan”) and its CEO to settle the November 2020 lawsuit that he filed against Driver Loan and its CEO alleging that the defendants engaged in deceptive acts and practices in violation of the UDAAP prohibition of the Dodd-Frank Act on taking deposits and granting loans to consumers.

In its lawsuit filed in Florida Federal District Court, the CFPB alleged that, since 2017, Driver Loan has offered consumers short-term, high-interest loans. He also alleged that in 2020 Driver Loan started receiving deposits from consumers to fund their loans. The CFPB alleged that the defendants engaged in deceptive practices by:

  • Falsely represent that consumer deposits were held in FDIC insured institutions and would have a guaranteed rate of return.
  • Market your loans as having an APR of 440% while actual APRs were above 900%.

An act or practice is considered deceptive in violation of the UDAAP prohibition if there is a material representation or omission of information that could mislead consumers acting reasonably in the circumstances. In support of its claim that the defendants’ false statements regarding deposit accounts were misleading, the Bureau alleged that a consumer acting reasonably in the circumstances would believe that Driver Loan offered a safe product. According to the Bureau, because the interest rates charged by Driver Loan were usurious under Florida criminal law, the defendants created a significant risk that Driver Loan would not be able to collect or meet overdue loans. its obligations to consumers who sought to withdraw deposited funds.

The proposed final judgment and order would require defendants to reimburse approximately $ 1 million in consumer deposits and pay a civil fine of $ 100,000. It would also permanently prohibit defendants from engaging in deposit collection activities and making misleading representations to consumers.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: US Consumer Protection

5 stupid things that catch the FTC’s attention

Kronenberger Rosenfeld

The worst nightmare for an affiliate marketer is to wake up in the morning and find that the Federal Trade Commission (FTC) has shut down your business, raided your offices …

CFPB targets payment processors

Lewis Brisbois Bisgaard & Smith LLP

Washington, DC (May 25, 2021) – On March 3, 2021, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a complaint that has significant implications for the payment processing industry.

Source link

]]> 0
30-year loans fall as most rates rise Mon, 07 Jun 2021 13:05:01 +0000

On June 7, 2021, average mortgage rates were up for most loans, but the 30-year mortgage broke the trend. Find out more here.

Interest rates for individual borrowers are determined based on their credit score and other financial credentials. But it’s always useful to watch trends in average mortgage rates to see what you can expect to pay for your home loan if you’re a typical borrower.

Here’s what the average mortgage rates look like on Monday, June 7:

The data source: The Ascent National Mortgage Interest Rate Tracker.

Start your journey to financial success with a bang

Get free access to the selected products we use to help us meet our financial goals. These fully verified choices could be the solution to help you increase your credit score, invest more profitably, build an emergency fund, and more.

By submitting your email address, you consent to our sending you money advice as well as products and services which we believe may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.

30-year mortgage rates

The 30-year average mortgage rate today stands at 3.159%, down 0.002% from Friday’s average of 3.161%. For every $ 100,000 borrowed at today’s average rate, your monthly principal and interest payment would be $ 430. Your total interest charges over the life of the loan would equal $ 54,882 per $ 100,000 borrowed.

20-year mortgage rates

The 20-year average mortgage rate today stands at 2.938%, up 0.025% from Friday’s average of 2.913%. At today’s average rate, the monthly principal and interest payment would be $ 551 per $ 100,000 of mortgage debt. For every $ 100,000 you borrow at today’s average rate, the total interest charge would be $ 32,360.

When you reduce your 10-year payment term compared to the 30-year loan, it results in a big increase in your monthly payment amount. However, since you pay interest for a decade less, you’ll save a lot of money over the life of the loan.

15-year mortgage rates

The 15-year average mortgage rate today stands at 2.413%, up 0.011% from Friday’s average of 2.402%. A mortgage at the current average interest rate would cost you $ 663 per $ 100,000 borrowed. You would have a total interest cost of $ 19,286 per $ 100,000 of mortgage debt over the term of the loan.

The switch to a 15-year loan accentuates the trends observed with the 20-year loan. Each monthly payment is much higher due to the very short repayment time. But you cut the interest payment time in half compared to the 30-year loan. This will save you a lot of money over time.

5/1 arm

The average 5/1 ARM rate is 3.001%, up 0.103% from Friday’s average of 2.898%. This rate is only blocked for the first five years and can be adjusted annually thereafter. Since rates are still near their all-time highs, they could very well rise and lead to higher monthly payments and total borrowing costs. Take this risk into account when deciding whether an ARM is right for you.

Should I lock in my mortgage rate now?

A mortgage rate freeze guarantees you a certain interest rate for a specified period of time – typically 30 days, but you may be able to guarantee your rate for up to 60 days. You will usually pay a fee to lock in your mortgage rate, but this way you are protected in the event of a rate hike before your mortgage closes.

If you plan to close your home within the next 30 days, it pays to lock in your mortgage rate based on today’s rates, especially since they are very competitive. But if your close is more than 30 days away, you might want to choose an adjustable rate lock instead for what will usually be a higher fee, but could save you money in the long run. A variable rate lock allows you to get a lower rate on your mortgage if rates drop before you close, and while rates today are still quite low, we don’t know if rates will go up or down. over the next few months. As such, it is beneficial to:

  • LOCK if closing 7 days
  • LOCK if closing 15 days
  • LOCK if closing 30 days
  • FLOAT if closing 45 days
  • FLOAT if closing 60 days

To find out what rates are available to you, compare the rates of at least three of the top mortgage lenders before you lock in.

Source link

]]> 0
How To Get A Land Loan To Build A Home – RISMedia | Sun, 06 Jun 2021 17:02:28 +0000

Are you wondering how land loans work? Perhaps you are planning to buy land that will be a perfect fit for your future home? Obtain a loan for a land is a smart move, especially when you’re not building your house right away.

Obtaining land financing is a great way to make your purchase on time. You can take out a mortgage on land the same way you would a house – the only difference and downside is the valuation of the land. The value of land is more difficult to determine compared to a house.

Let’s take a look at everything you need to know about acquiring a home loan, to make your financing a hassle-free and easy process.

Where do you get your loan from?
Specific banks or lenders will grant you land loans. You can search for mortgage lenders by asking around, possibly a real estate agent, or by doing your own research online. Local credit unions are a great place to start. Very often, local lenders are an excellent source for finding land loans.

Once you find the lender of your choice, they will analyze your credit history as well as the market value of the land. Then they will make a final decision regarding your eligibility to purchase that land.

How to get land loans?
The process of obtaining your land loan takes many forms; this is because there are several types of loans. However, in all land purchase transactions, it would be best to have a good credit rating, good debt-to-income ratio, and ongoing income.

Land is considered a riskier investment than a building. This produces some consequences. First, you will have to pay more out of pocket for the down payment and the interest rate.

Second, land loans are usually only granted on a short term basis. The mortgage lasts only two to five years. If you buy this land to build a house, you might get a longer loan.

Types of land loans
As we mentioned earlier, the process for getting your mortgage loan varies depending on the type of loan you are applying for. Here are the most common types:

Loan of raw land
This applies if you intend to buy raw land; which means there are no upgrades or construction on it. There are no facilities either: no electricity, no sewers, roads, etc.

In this case, the risks are the highest for any lender. The risk increases in proportion to the time required to develop the land. Thus, this type of land loan is the most difficult to obtain.

You can expect high interest rates and larger down payment requirements. For the gross land loan, you will need to cover up to 50% of the amount. If you want to increase your chances of getting such a mortgage and get good terms, you need to present the lender with an elaborate and effective land use plan.

Land loan
This is the right loan if you want to buy land with a certain level of infrastructure, such as gas, water and electricity. The land will most likely be used for construction development, which is a safer investment for lenders.

They will be more inclined to grant you the land loan under such conditions. The more land is improved, the better the chances of obtaining a land mortgage. Usually, the terms of the contract will also be more flexible.

Interest rates are lower than gross land loans due to less risk. You can expect the down payment requirements to be between 30-50% down payment.

Building land loan
If you are building a house right away, you would be much better served with a construction loan. Construction loans provide funds to build the house which is then turned into a permanent mortgage.

This guy is a two in one loan. You can apply for a loan that covers both the land you want to buy and the construction you want to develop on that land. However, this requires a great credit score (above 700), low debt to income ratio and high income, as well as construction development plans must bring real value.

In this case, you will still have a deposit of 10-20%. Construction plans should be made by a professional and reputable developer.

You must also present the precise construction schedule and the cost estimate. The lender might even recommend several reputable builders. If you work with them, your chances of getting a construction loan increase dramatically.

Keep in mind that the lender will periodically inspect and get involved in all stages of the construction. They will receive their money in multiple draws throughout the process. The drawing schedule is agreed between you, the lender and the builder.

This type of mortgage is short term, the average being one year. During the construction period, you will pay interest; then the loan is transformed into a real estate mortgage, for a period of 15 to 30 years. The house can be either a modular construction or a traditional house built from sticks.

Interest rate
Generally, all types of land loans are considered risky by any lender. So you can expect high interest rates from the start. A good credit history gives you hope for better interest rates.

To give you a general idea, here are the average rates for a 10-year loan and a 30-year loan, respectively:

– For gross loans: 4.25-5.25% / 4.90-5.90%
– For lot loans: 4-5% / 4.65-5.65%
– For construction loans: variable rate (around 5.25%)

Choose the land
You have a better chance of getting a land loan if you take several land considerations into account:

– The limits: they must be very well defined. It helps establish the value of the land. Usually, lenders require a land survey before deciding if you are eligible or not.

– Restrictions: Lenders want to know if the land is part of various associations or property agreements. With that comes responsibilities they might not be willing to take on.

– Utilities: The more there are, the better it is for your land to make a good impression with your lender. They appreciate access to paved roads, electricity, gas connection, sanitation. If any of them are missing, present your lender with a detailed plan to add them.

– Targeted development: The value of the target land increases if the whole area is under development, such as if there are plans for shopping malls, residential buildings, highways, etc. Present all of this to your lender and you will quickly get your land ready.

Final thoughts
Land loans provide an excellent financing opportunity for those who wish to purchase land to possibly build their dream home or create a business opportunity. You should now have a much better understanding of how home loans work.

Bill Gassett is a nationally recognized real estate leader helping people buy and sell MetroWest Massachusetts Real Estate for 33 years. It has been one of the best RE / MAX REALTORS® in New England for the past decade. In 2018, he was the number 1 RE / MAX real estate agent in Massachusetts.

Source link

]]> 0
MNR provides loans for energy efficient upgrades Sun, 06 Jun 2021 02:13:28 +0000

The Missouri Department of Natural Resources provides $ 5 million in loan financing for entities to make investments that reduce their energy use. The ministry’s energy loan program is accepting applications until September 30, and more information for applicants can be found on the program’s website.

Public schools, public higher education institutions, non-profit hospitals and local governments are eligible to apply for loan funding. The money can be used for a variety of energy efficient investments, such as high efficiency lighting fixtures and insulation upgrades.

Investments reduce costs for loan recipients through energy savings. The loan recipients are usually able to repay the loan using only the money saved through the improved costs.

Daniel Dahler, the energy loan and energy insurance program supervisor, said the timing of payback varies. He said loans that fund the replacement of old fluorescent lights with LED lights can take two to four years to pay off, but the cost savings and return on investment are then evident.

Another advantage is that loans are not defined as debt, so they do not harm the debt limit of entities. Dahler said this allows entities to make other needed improvements, such as repaving parking lots or paying teachers higher salaries.

The energy loan program has provided loans to entities in nearly every county in the state, and Dahler said the goal is to continue to reduce energy use and costs in Missouri.

The ministry announced the application period in a press release on Tuesday. “As part of the state’s efforts to support and strengthen local communities, the Department of Natural Resources is pleased to offer a round of energy loan program to help eligible applicants achieve economic energy improvements,” he said. said Carol Comer, director of the Ministry of Nature. Resources. “The program can improve the resilience of communities, save taxpayer dollars and support jobs in Missouri.

More than $ 118 million has been provided under the energy loan program since its inception in 1989, and there have been no defaults in the history of the program. These loans have resulted in energy savings estimated at over $ 214 million. Dahler said the program has grown since its inception because the interest on the loan is reinvested to grow the fund.

“It shows that we are good stewards of state money and that we are trying to directly affect the voters we serve,” Dahler said.

Source link

]]> 0
Interest-free loans are now a thing – here’s how the options available in South Africa stack up Sat, 05 Jun 2021 04:23:10 +0000

Lay-by companies in South Africa

  • Interest-free loans, like the new wait models, are increasingly common in South Africa, especially among online merchants.
  • Buyers most often just pay a deposit and receive the goods in advance – with several weeks to pay off the balance, without accruing interest.
  • However, they are usually limited to one low value purchase at a time and are subject to fines if you are unable to pay on time.
  • Here’s how three new-style local waiting options stack up.
  • For more stories go to

Interest-free loans to repay purchases of specific items are increasingly common in online and physical stores in South Africa.

At least three local businesses, LayUp, PayJustNow and Payflex, are now competing to offer buyers an engaging approach to the otherwise archaic hold option. These redesigned on-hold services allow buyers to make a deposit, in the case of two or more goods received in advance, and then pay the balance owed over the following months – at no additional cost.

For buyers, this is largely a no-catch deal. After signing up and receiving approval, you will simply need to pay an agreed down payment (usually in the range of 25%) and then meet your subsequent payment deadlines each month thereafter.

Unlike traditional rest areas, subsequent payments don’t inflate the price of what you buy, and there are no fees to pay either. Some will even release the goods with just the small deposit paid. Provided you don’t violate the deal, this essentially amounts to an interest-free loan to pay off one or more items from a specific retailer.

There are obviously some limitations. The first being that it looks like these new parking companies are working hard to lock retailers into exclusive deals, which means limited leeway in choosing who takes care of your parking lot.

Membership of large retailers is also relatively limited – for now. While stores like Edgars, Pro Shop, Cotton On, and Cape Union Mart flirt with these options, some limit their integration into the online-only space. This means that most of the retailers that the local hold businesses have subscribed to are all pretty random businesses and ecommerce sites that you may never have heard of.

This, it seems, is part of the business model of this new wave of hold businesses. Their sales pitch is primarily aimed at merchants – with promises like: “Convert up to 60% more customers today”, “Increase sales” and “Increase average order value to 25 % “.

This is a particularly attractive option for niche stores looking to increase their online presence and hopefully generate more sales. And in most cases, they also aren’t required to pay relief processing companies anything up front, or take any risks, to offer their clients interest-free payments. Instead, they take a commission from the merchant on every sale they make – usually around 5%.

The risk to consumers is that stores may – at some point – decide that the cost of interest-free payments should be borne by buyers, much like smaller independent stores that historically included a surcharge for credit card payments. or cash rebates. But for now, it looks like it’s not happening, and most stores are happy to swallow that cost in the hopes that it will be offset by the improved conversion rate.

The talk to buyers is equally compelling, but not without some pretty detailed terms and conditions that will keep you in the loop if you don’t make your payments. While companies claim their late payment penalties are low, given the equally low value of purchases, they aren’t always surprising – in the worst case scenario, you could end up with another R375 on top of your loan of R1 500, for example.

As with normal credit accounts, you will also need to build a reputation for yourself if you want to extract real value from the service. Initial purchases are limited to one at a time for nominal amounts of around R 1,000 to R 1,500 – but each time you prove your ability to repay them you will earn the right to receive higher limits and spend more. simultaneous orders.

Here’s how LayUp, PayJustNow and Payflex compare

Waiting comparison table

Waiting comparison table

Receive a daily update on your mobile phone. Or get the best of our site by email

Go to the Business Insider home page for more stories.

Source link

]]> 0