Getting Home Equity Loans With Bad Credit Is Helped By Three Simple Factors

When we take on the expense of buying a home, one of the facts that convince us the investment is worth it is that the home has a growing value, even while the mortgage is being repaid. Even when we have secured home equity loans with bad credit, this is the case.

With other types of loans, the value of the item purchased with the aid of financing is not really of any use until the loan is completely repaid. But homes are different, and securing loan approval is made easier by virtue of the fact the value of the property will only ever increase, and not decrease over time.

But, as with all forms of financing, there are risks involved in getting a home equity loan, so it is important to take a close look at the ins and outs of any deal. Having three factors, in particular, in good order can enhance the chances of getting the best deal possible.

Know Your Credit Status

Lenders want as much in the way of assurance when granting a loan, and it is no different when considering approving home equity loans with bad credit. While the equity used in the deal is effectively security, lenders would rather receive repayments due each month. It is a lot simpler for them.

Life can be made very difficult when a credit status is poor. The credit status relates to the credit rating an applicant has, and if it is very poor then it is worth taking some time to improve it before securing loan approval on a much larger sum. This is because ratings affect the interest charged and the terms of a loan.

Finding out a credit status gives applicants the chance to put together better strategies to secure the best deal possible. And this head start can be invaluable when seeking approval on a home equity loan that could be as high as $75,000, depending on the total value of the equity involved.

Practical Management with Bad Credit

When an applicant has a low credit score, it is a good idea to improve it as much as possible. Again, this is all about getting the strategy right, and while it is not impossible to get a home equity loan with bad credit, the terms will not be ideal.

The most effective way of improving these scores is to take out a series of small personal loans, use them to clear existing debts immediately, and then ensure repayment of those loans occurs without a hitch. Between old debts cleared and a new one being repaid, the score can increase considerably. The chances of securing loan approval with good terms is improved.

Taking out payday loans to accomplish this can be useful, but their high interest rates and short repayment schedule can mean added financial pressure. In this case, drawing up a shortlist of home equity loan providers and talking to them about options can prove more rewarding.

Approach Subprime Lenders

A third way to improve the chances of getting approval on a home equity loan with bad credit is approach subprime lenders. These have pros and cons, of course, but are generally more open to lending to people with very low credit scores.

What needs to be kept in mind, though, is that the interest rates charged by these lenders are higher than normal, but more competitive than those charged by traditional lenders. Securing loan approval requires less strategy, as the loan products tend to be ideally suited to these applicants.

Still, a home equity loan from a subprime lender has its risks, and it is essential that accurate calculations be done to ensure the repayments are affordable and the risks are kept to a minimum.

Start-Up a Business by Buying a Business – ‘Real Life’ Practical Advice Shared

This is a quote from Ray Thomas who started his own business by buying an existing one. He chose to buy a franchise resale for reasons you are about to learn. These are his first wise words of advice and ones that are valuable to anyone thinking of buying a business as a way to start their own business, whether in the UK, North America or anywhere in the world.

“When buying a business, check and recheck your ‘due diligence’ there’s always something that you miss, something that’s not obviously apparent when you first start negotiations – don’t rush -take your time to understand the business you’re buying into”

Ray was very careful in his choice of business. He took the buying process step by step over a number of months. He would like to share this experience, captured in these key points with you.

• Choose a business that relates to your commercial experience and your own business skills
• Buying a franchise resale has a number of benefits. Two of these are the training and support you’ll receive from the franchisor; another is acquiring a going concern with an existing customer base
• Get the latest trading figures to see how the business is performing and whether any circumstances have changed since the business was valued for sale.
• Check the customer base to check the number of active and dormant accounts
• Examine the customer profile to see how the business is spread between accounts – if the business is reliant on one or two accounts, the loss of these accounts could dramatically damage your future income.
• If possible, agree a hand-over period in which the previous owner introduces you to the client base and explains the ‘back-office’ systems and day-to-day running of the business.
• Make a generous provision for working capital to cover running costs – and keep an extra financial contingency for the unexpected.

To understand Ray’s story here’s some interesting background. Ray trained as a mechanical engineer. This gave him a career long ability to discipline his thinking and develop his analytical and organisational abilities. His outgoing personality and communication skills came into play as he moved into sales. Over time, he became a regional manager with a multinational company, firstly looking after the South West then extended his territory responsibility across to Wales and up as far as Birmingham.

As demands increased without a commensurate increase in his salary package, Ray started to explore opportunities where he and his family would receive a greater return for his efforts by becoming his own boss. He investigated a number of different business avenues and narrowed the options down to franchising. The question was whether to start from scratch with a ‘virgin’ franchise territory or to buy an existing operation. The other question was which franchise to select

As Ray had experience of the motor trade, at one time being the sales manager of a chain of car dealerships, he examined a franchise involved with supplying garage workshops with tools and another specialising in bodywork repairs. He also explored franchises that were related to his more recent experience in the Health & Safety and Personal Protection Equipment (PPE) sector. Finally he chose a business-to-business (B2B) franchise that specialises in the supply and servicing of cleaning and hygiene products.

The franchise head office volunteered two start-up territories within reach of his Swindon base, and one resale franchise in Swindon his home town. Buying a resale franchise meant a higher investment but gave him a fully functioning business with an established clientele and an established reputation.

The Purchase Negotiation

Ray contacted the existing franchisee and spent a day with him to find out more about his territory and customers. The franchisee wanted the business to be transferred to someone who would manage the business well and look after his existing customer base. He’d decided to emigrate to France as part of his own life plan.

On closer inspection Ray saw the business had been losing sales and turnover had slumped in the last year. Another worrying aspect came to light. One customer was responsible for 50% of sales. If that customer withdrew his business the whole financial picture would change dramatically. These important factors demanded a revaluation and price renegotiation.

A revised price was agreed and on 26th April 2010 at the age of 60, Ray Thomas became a business owner. A new, exciting but challenging chapter in his life had begun.

Looking back, Ray would like to share these thoughts with you:

• Put away those rose-tinted glasses when buying a business. They’re always things that are not immediately evident when first learning about a business, not because they’ve been deliberately hidden but more to do with your unfamiliarity with the business operation.

• Try to identify the pitfalls – get expert help to review the company’s trading record and customer base.

• Examine in fine detail the basis of any ‘goodwill’ attributed to the company. Remember that ‘people buy people’. It’s potentially dangerous to buy a business that has been built mainly on the ‘personality’ of the incumbent owner. When the business changes hands, customers may not want to keep their business with you.

• Never rest on your laurels. Look for new business every day. It is inevitable that for one reason or other you’ll lose customers. You need to bring in fresh business to compensate for business lost.

• Make sure you ‘over-deliver’ on the quality of service you provide. You may not be able to compete on price these days – but an attentive, professional service not only wins business but builds customer loyalty. You’ve heard the saying that some people ‘know the price of everything but the value of nothing’. Due to cost pressures customers do switch to get a better financial deal but often return when they realise they’ve forfeited quality, reliability and product performance.

• Create a financial buffer to fund unexpected costs. For us, the rise in diesel prices has hit our van delivery costs. Unexpected events are another reason why you should grow your sales from existing customers and put time aside to contact and win new customers.

‘Success before Start-Up’ is a book everyone should read before starting their own business. It contains valuable advice from 18 different small business covering many of the most popular business options, from franchising to opening a retail shop, to offering trade or professional services or buying an existing business. The helpful advice is designed to stop you making the mistakes that cripple a new business given by people who want to share their experiences. The advice is relevant to any business wherever you are in the world as the principles are the same. The book is written in an easy to understand style. Importantly, the author has experience of setting up and running his own small business and speaks from experience – rather than just academic theory. Success before Start-Up is available from Amazon in paperback and Kindle.

Save Money With Small Personal Loans – Unsecured And Low Interest

A small personal loan usually leads folks to think about payday or cash advance loans. These extraordinarily high-interest loans are meant to tide you over until the next payday. Unfortunately, payments on these loans become a budget item for months and months, costing hundreds in interest for many.

Other folks think of a loan or line of credit at around $10,000 or below. These are thought of as relief from increased credit card debt or other types of spending drags on the budget. They are far cheaper than credit card debt.

For some, these loans are hard to get, especially when faced with a shady credit history. With poor or no credit, most lenders want some form of substantial collateral as security on the loan. But, for those with good credit, many lenders are available that offer small, personal loans that offer interest rates so low that they are unknown in the credit card industry.

Small Loans Help Save Money

How can a small, unsecured and low-interest loan save a borrower money? Consider these ideas for loan use as opposed to credit cards and other high-interest debt:

Consolidation. Taking a low-interest personal loan to pay off a number of high-interest can save thousands in interest over just a few years.

Major Purchase. If you need a major appliance or maybe a boat, paying it off with an extended payment plan at low interest is often a good way to go.

Emergency. Money in the bank from a small, low-interest personal loan to cover unexpected costs or an emergency is far better than laying that unexpected, emergency debt on a credit card.

Low Interest Rates Are The Key to Savings

Small personal loans usually have interest rates as low 5.9%. That is hard to find on a credit card. As noted above, taking a ton of debt off credit cards charging up to 20% in interest is rewarded with a big sigh of financial relief.

Saving Money With Home Improvements

The new windows that are so popular and so energy efficient can save you a lot of energy costs over the years. An energy efficient furnace can go even further in fuel savings over the years to heat and cool your home.

Perhaps you do not have enough equity in your home to qualify for a second mortgage. Or a home equity line of credit may be beyond your reach. An unsecured personal loan may be a good option to allow you to make those improvements rather than wait until equity accrues.

Save Money on Rainy Days with a Low Interest Personal Loan

Who hasn’t faced an emergency in their life? And, of course, emergencies usually require money. What do you do about a dental expense not covered by insurance? How do you pay for an unexpected trip to cover a family crises? Who writes the check when the car needs a thousand dollar transmission? These things are not in the household budget. A small, low interest personal loan could cover these untoward expenses.

Finding a Low Interest Personal Loan

Now you know the benefits, you are probably wondering where these loans are available. Get to your bank, you credit union, or your local savings and loan. If you have an account at one of these institutions, all the better. Though this is not a guarantee for approval, it helps. Another good place to look is online. Some lenders there offer these loans at excellent interest rates.