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MIND THE GAP – HOW A BRIDGING LOAN CAN HELP

ik@ippei.com (Tori Klein) — Thu, 26 Dec 2019 14:56:38 GMT

In this article, we’ll look at short-term business loans – what they are, the benefits of using them, and common uses for quick access to funds for up to 12 months.

Buying a new home is exciting, but the timing can present a problem when it comes to selling your current home. In a perfect world, you would sell your existing home first, then use the proceeds to fund the purchase of your new home.

But as we all know, life often isn’t ‘neat.’

For instance, you might find yourself in a position where you’re unable to sell your current home before purchasing your new home, or you come across your dream home before even considering selling your current place Equally, you may not want to rush the sale of your current property and potentially sacrifice a better sale price that may be obtained if you waited a little longer. Another consideration is that you would prefer to stay in your current place while you purchase your new home to save the hassle of renting or moving twice within a short period of time.

In all these instances, a bridging loan can be a great alternative.

What is a bridging loan?

As the name suggests, a bridging loan helps ‘bridge the gap’ between the purchase of your new home and the sale of your current home. A bridging loan can be an ideal solution when you need to act quickly to secure a new property and the settlement dates for purchasing and selling don’t match, which is often the case.

What are the benefits of a bridging loan?

A bridging loan lets you do things on your terms during what is an already stressful time. The main benefit of a bridging loan is that it enables you to have the breathing space to avoid the feeling that you need to urgently find, or potentially pay an inflated price for, an upcoming property. Equally, a bridging loan removes the pressure of feeling forced to sell your existing property for potentially a lower amount due to time restrictions. It also helps with the timing of your move from your current home to your new home without the need to pay storage costs, hotel accommodation or rent.

How does a bridging loan work?

Bridging loan lenders assess the equity in your current home, the price of your new home and then tailor a combined loan while you sell your current home. Bridging loan providers offer a range of options to suit your particular circumstances and timing requirements.

A bridging loan from a short-term lender can be advantageous. Short-term lenders are often ‘private lenders,’ which means they have far greater control over the loan amount and terms able to be offered. As such, private lenders are renowned for being very flexible with the borrowers they help, as well as types of loans they write. Also, because short-term loans typically only require minimal paperwork, they’re usually quick to process – which means that funding is often available within as little as a few days, and in many cases, you can easily apply online .

What are the benefits of a short-term home equity loan?

Typically, if you’ve owned your home for a number of years, it is likely that you have built up some additional equity. There are many benefits to tapping into this source of funding. Top of the list of benefits are the relatively low interest rate associated with this type of loan, compared to alternatives such as personal loans or credit cards. In addition, short-term home equity loans allow you to access a large amount of funds that align with the equity you have accrued in your property. Borrowers also love that applying for a short-term home equity loan is easy, as these loans require minimal paperwork and can often be applied for online. Lastly, short-term home equity loans are readily available from a wide range of lenders, including private lenders and fintechs.

Key takeaways

Bridging loans in Australia are well-established and can be a great choice if you need to act fast to secure your new dream home and haven’t yet sold your current residence.

LOANS TO HELP YOU GET DOWN TO BUSINESS

ik@ippei.com (Tori Klein) — Thu, 26 Dec 2019 14:56:38 GMT

In this article, we’ll look at short-term business loans – what they are, the benefits of using them, and common uses for quick access to funds for up to 12 months.

What is a business loan?

A short-term business loan in Australia is used for business-related purposes, such as investing in equipment, purchasing, improving cash flow, or debt consolidation. Short-term business loans can help smooth out the business’ financial ‘ups and downs’ or help you take advantage of opportunities to grow your business. Short-term small business loans are usually for $25,000 to $500,000, with a term of 3 to 12 months.

Why you might consider a short-term business loan

Short-term business loans can be used for a range of scenarios, including:

Business expansion: “It costs money to make money” is the old adage and growing a business is no different. Advertising, hiring new staff, expanding or renovating, are common costs associated with a growing business.
Inventory: Investing in inventory, including expansion and replenishment, can be tremendously beneficial to boost revenue. Though it’s often a double-edged sword as expensive purchases can hurt cash flow, especially when businesses have seasonal demand.
Cash flow: Small businesses, in particular, have to deal with cash flow fluctuations when inventory is slow to move or customers are slow to pay.
Equipment: Purchasing new equipment, or repairing/ replacing existing equipment, is often an unexpected (and hefty) expense that is required to keep the business moving.

The advantages of short-term business loans

A short-term business loan has many advantages, including:

Easy application process: Apply online for short-term business loans in Australia, with a relatively simple application process from a range of private lenders and fintechs
Real-time access to funds: Once you meet the lending criteria and the loan is approved, funds can be accessed in as little as a few days
Keep control: A short-term business loan ensures you retain full control with no external interference, which is often viewed as preferable to inviting investors into the business
Temporary: Once the loan is repaid, your obligation ends. Whereas in the case of equity finance (investors), you have new shareholders for potentially a long time
Tax-deductible interest: Payments are more manageable as the cost of funding business growth (loan interest expense) can be deducted from income generated

Types of business loans

There is a range of short and longer-term loans available to businesses in Australia:

Term loan: Borrow a single lump sum to be repaid over an agreed period of time, with fixed or variable interest rates
Line of credit: Access funding up to a certain amount that can be drawn down as required to help manage cash flow or pay an unexpected expense.
Business overdraft: Attached to your business bank account, an overdraft allows you to overdraw up to a pre-approved amount.
Business credit cards: Business credit cards are convenient, though it’s easy to be stung with high-interest rates if the card balance isn’t paid off in full each month.
Equipment lease: Funds provided and secured against specific business equipment (or vehicles).
Invoice financing: Invoice financing, also known as invoice discounting or debtor finance, pays the business the majority of the customer’s invoice immediately, transfers the liability of a customer’s invoice to the invoice finance firm, then takes a percentage of payment once the customer pays the invoice

Key takeaway

If you own property, a short-term business loan is increasingly being considered as a way to obtain funds relatively quickly. You can apply online for a short-term business loan through a variety of lenders in Australia – particularly through private lenders and fintechs. This form of funding can be used for a short period of time (3 to 12 months) for a variety of purposes.

WHY NOW MIGHT BE THE RIGHT TIME TO GET A MORTGAGE

ik@ippei.com (Tori Klein) — Thu, 26 Dec 2019 14:56:38 GMT

In this article, we’ll discuss if now is a good time to get a mortgage, the importance of your particular financial situation and top tips to make the process easier.

What is a mortgage?

A mortgage is a form of debt that is secured against a specific piece of real estate or property. They are also known as ‘liens on property’ or ‘claims on property.’ Most new property purchases have a mortgage attached, especially for first home buyers.

Generally, a mortgage is a long-term loan – often for a duration of anywhere from 15 years up to 30 years. The term length is determined by several factors including the size of the loan, your income (or serviceability) and your age.

Less commonly known is that there are short-term mortgage loans , which are usually five years or less. A short-term mortgage is increasingly considered from private lenders in the absence of being able to secure a loan from a traditional financial institution, like a bank.

When is the best time to apply for a mortgage?

There are many factors at play when it comes to getting a mortgage. It’s important to balance finding the right property, having an adequate deposit (at least 20% is a good rule-of-thumb) and getting your finances in order. A deposit of 20% or more also helps you avoid paying Lender’s Mortgage Insurance (LMI) in many cases.

In the current climate, many borrowers are also refinancing – discharging their current mortgage and replacing it with another from a different mortgage lender at a better rate. If you are considering this option, look carefully at the transaction costs, which include any fees and charges your current lender may impose for early payout of your loan.

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Mortgage lenders will appraise your deposit (or equity in your current home), your income, other debts (credit cards, car loans, etc.) and your credit history when considering your eligibility for a mortgage. Unsurprisingly, the better your financial position, the more likely you are to be approved at the lowest possible interest rate. That said, there are an increasing number of lenders that provide mortgages to borrowers who don’t have all their paperwork in order, or who may have experienced credit history challenges. Consider these tips to make the process easier:

Have a good deposit: Save at least 20% deposit, or have that equivalent in equity in your current home.
Get your finances in order: Have your paperwork organised, including at least six months of bank statements, current payslips, last two years’ tax returns, details of any other loans, etc. It’s also helpful to have a clear view of your total household expenses.
Find out your credit score: There are major credit score providers who offer free consumer credit scores and reports that will help you understand your credit-worthiness in the eyes of mortgage lenders, who will access these reports when you apply for a loan.
Pay down debt: Less debt means you can borrow more and better service your mortgage loan.
Work out your budget and capacity to pay (service) the loan: You need to understand how much you can afford to pay each month in principal and interest. If an increase in interest rates will make it difficult to meet your repayment commitments, then consider a fixed interest rate loan.
Shop around for the best deal: There are many sources for mortgage loans that suit your requirements – that may or may not be with one of the big banks. Consider non-bank and private lenders, and keep in mind that mortgage brokers can do the shopping around for you, should you prefer.

Key takeaway

So, is now a good time to get a mortgage? As always, it depends on your personal circumstance. That said, many borrowers are taking advantage of historically low interest rates and high levels of competition from lenders trying to secure more customers.

750da26a6d76dc7c9b3ad96e

MIND THE GAP – HOW A BRIDGING LOAN CAN HELP

In this article, we’ll look at short-term business loans – what they are, the benefits of using them, and common uses for quick access to funds for up to 12 months.

What is a bridging loan?

What are the benefits of a bridging loan?

How does a bridging loan work?

What are the benefits of a short-term home equity loan?

Key takeaways

LOANS TO HELP YOU GET DOWN TO BUSINESS

In this article, we’ll look at short-term business loans – what they are, the benefits of using them, and common uses for quick access to funds for up to 12 months.

What is a business loan?

Why you might consider a short-term business loan

The advantages of short-term business loans

Types of business loans

Key takeaway

WHY NOW MIGHT BE THE RIGHT TIME TO GET A MORTGAGE

In this article, we’ll discuss if now is a good time to get a mortgage, the importance of your particular financial situation and top tips to make the process easier. ﻿

What is a mortgage?

When is the best time to apply for a mortgage?

Key takeaway

In this article, we’ll discuss if now is a good time to get a mortgage, the importance of your particular financial situation and top tips to make the process easier.