Your Financing Strategy
Ask questions from your bankers which of one these will benefits you most and which one could be costly to you. You can also get free checks when you open your account, you do not need to pay for checks. All checks are processed the same way that is up to you and how you manage your money.
-Savings Accounts: Custom Savings, Money Market Account Checking Accounts: Economy Checking, Express Checking, -Regular Checking, Senior Checking, Student checking
-Your Debit/Visa Card to use for shopping could be free when you open your account, make sure you ask for it, at times they will ask you if you want one or not. Where you use your Debit/Visa Card to withdraw money matters to your bank, it could cost you for using it at the wrong places, ask your banker for information where you could use your card without paying extra charges...
Some banks charges between $1.00 up to $3.00 if you use their card to withdraw money from another bank that they do not do business with. It is your money...
Each one of the above has advantages and dis-advantages, be careful when you are opening your accounts; you could loose money to the bank right away. You also need to know if your monthly statements are going to be free or not, when you make inquiries, the bank could be charging you for too many inquiries. Some things are free from the big banks and something's are cheaper from the community banks.
Basic Requirements for lending you money:
· Savings and Checking Account
· (2) Good Credit or No Credit it depends where you are getting the money.
· (3) Collateral such as your House, Car, Boat, Gold/diamond or any valuable assets they can hold on
· Driver's License,
· Social Security numbers
· Good Employment, at least for six months.
Lenders Information:
Big Bank requirements-
Can be very tough to meet because they have to abide by the 'Federal Reserve Bank or Federal Deposit Insurance Corporation (FDIC)' regulations. They got their money from the Federal Reserve Bank at a lower rate, however, they could turn around and loan it to the smaller banks at a higher rate, and the smaller banks loan it at higher quote rate to the public.
Community Bank requirements/Credit Union:
Well, the community bank is no different either, they turn to the big banks to borrow money at a lower rate so that they can loan it to their customers/clients at a higher rate to make some profit to stay in business.
Private Capital market requirement:
This is where the business gets tougher. The Capital Market enterprise is a big boy on the Wall Street, where they can finance just about anything they like, because they are not being regulated by the government, it is an individual rich businessmen that have money to loan out at a higher rate. They are not required to follow financing rule rigidly as the bank does, but they still have follow the consumer law that protect all of us from being taken advantage of.
Family friends requirement:
This one is your best source of financing, if you could find a rich friend or family friends that can loan you money without any attachment or collateral. They may ask you to pay them some small interest, or none it all depends what you are using the money for, at they would like to get a piece of the apple when they know you are going to make a lot profit.
Collateralization:
There some companies out there that would loan you money to meet your emergency needs, but becareful, they may ask you to give them your house, car, motor cycle or any of your valuables for collateral just in case you were unable to pay them back, but, they are very quick to take your valuables and you may not have any re-course to take them to court for doing so. I would stay away from such financing unless you have to...
There is going to be a time when we are going to need finance or re-finance our mortgages, car, motorcycle, big boat, air-planes etc., that we cannot come up with up-front lump sum money to pay for it This force us to turn to our bank, family friends, private capital market, small loan companies to loan us that money. This is where we are being taken advantage of by offering us some sort of un-affordable rates. At first you would think this a great opportunity that it will not be problem, you could afford that payment being offered to you by your lender, you better think again before you sign that dotted line. They could be collecting interest from you money for long time without any of it going to your principle.
Pay attention to dotted Line and Small print in the loan documents:
The loan documents can be very tricky to read when you are not an attorney, the small fine prints areas are very important areas to pay attention to, because this is where they hid rates, timeline, and warrante, but if you don't pay attention to the rates they quote or offer to you in the loan document that you are going to sign you could be losing a lot of money. You probably better off to take to your attorney before you sign the dotted line.
In the fine print of the loan documents is where they hid most important information that your lender did not want you to know about, especially mortgage and credit card documents. It sounds strange, but it is true, If you don't believe what I said here in this document, go to your loan documents and read the small prints in there you may find out something that you would not like to see or hear about, or if don't believe what I said here, ask yourself a question of why didn't they just print the whole loan documents in a readable format with nice fonts that an average third grader can read and understand it without having to scratch their head or look up words in the webster dictionary for interpretation of words, after all you are the consumer paying them for this services and they will be collecting interest from your financing for such a long time. 95% of mortgage homeowner never gets to the point of paying principle or their mortgage finance off before being taken away from them, but the bank or private investor already started to benefit. Yes, I understand they took the risk to finance us.
I think what is fair is fair, they should make the loan documents more readable for us, and there should be no small prints that is had to read on any loan documents. They should be in a readable format that average Joe can understand; my question all the years was why are they making it so complicated to read if they do not have anything to hide? I also think the loan documents should not have so many pages when we are talking about saving the threes... Not too many consumers read all these pages, it has no value to have so many pages when no one really reads it, of course the attorney will not be making money if they these document could be reduced to minimum.
My solution to this big fat loan documents should be to reduce them to minimum, all it should it be contain is, who own the house, the rate, how long is going to be paid, warranty, borrower's and co-borrower, and all other very valuable information it should not be more than 10 pages long.
Jangan Masuk Kedai Makan Yang Ada Gambar Ini!
Park Owned Mobile Homes - Cash Cow or Financing Pitfall?
First and foremost, the mobile home collateral is considered personal property when it is located in a park. It has, historically, been a quickly depreciating asset. The costs associated with lending on this type of asset push many banks out of the market altogether. This leaves park-owners and private investors as the driving forces behind the mobile home rental arena as far as mobile home park financing is concerned. A conventional financing program will not typically consider income from park-owned mobile rents for the debt service ability of a real estate loan. There are some higher rate alternative programs out there, which consider all park income - both mobile home rent and pad rent. The most common problem buyers have with these types of parks is the numbers sellers or Realtors provide them. They will often times consider all income when determining cap rates, value, etc. The incomes from mobiles are never used in determining an appraised real estate value. This is due to the fact that mobiles in parks are not real estate improvements. One cannot simply throw several different types of incomes together in the blender and determine a value based on a single cap rate. All parts are not equal. The income stream generated from park-owned mobile homes run different risks of interruption or loss than the income stream generated by a mobile pad. A safer income stream deserves a different valuation and also a different loan interest rate - a reflection of risk. The easiest way to picture these types of parks is in two components. You have the real estate component, which consists of dirt and any verifiable land improvements. Typical mobile home park improvements may include mobile pads, RV pads, clubhouses, laundry room, pool, office, etc. The real estate value is largely determined by the normal operational income generated from real improvements. You also have the personal property component or chattel. Personal property may include mobiles, equipment, appliances, etc. There are finance products available for these chattel portions at higher rates, shorter amortizations, and shorter fixed periods than one might expect with a normal real estate loan. These different streams of income deserve their own separate determinations for investment value. An income derived from rental real estate such as a mobile home park pad is viewed as more reliable and valuable than an income derived from personal property such as with a mobile home rental. The cap rate for a passive investment such as a mobile home park (considering pad rents only) may be in the 8% range in some markets whereas the cap rate for a more business intensive project such as mobile home or RV pad rentals may be in the 12% range for that same market. Obviously the actual cap rate will vary greatly across different markets, but a more risky income will still warrant a higher cap rate than a less risky income. This type of thinking suggests that $1 of income from a mobile pad is more valuable than $1 of income from a mobile home rental. Just because two income streams are generated through real estate improvements does not mean they are equal still. Although RV pads can be valued as real estate, they are still more work intensive and their income streams less reliable than a mobile home pad and therefore warrant a higher cap rate in valuation. This is apparent in the market vacancies any underwriter will utilize in determining the stabilized cash flow of an RV rental property. From an investor standpoint, reliable or easier-to-produce income is more valuable than income that takes more time to create or is less reliable. From a lending standpoint, reliable or easier-to-produce income contains less risk of interruption and therefore less risk of default. Lenders will only accept real estate as collateral to secure a CMBS (commercial mortgage backed security). A CMBS is a loan that is secured against commercial real estate and offers the flexibility to lenders of being sold much like any other bond security traded on the market today. This type of money has become much more prevalent in recent years. Many national lenders today, with products typically more aggressive than a local bank may offer, employ this type of lending structure. Very similar in investor consequence, a CDO or CDS structure may also be employed today. The issue of different asset-types (real estate and personal) being sold simultaneously often leaves inexperienced buyers in the middle of a purchase contract with a need for additional cash to cover mobile value since most lenders can only offer loan dollars against the real estate value. Real estate loans are not the answer without considering some type of cross-collateralization, which is atypical of most conventional finance options. One of the most common solutions is to have the seller carry a note for the value of some or all of the mobiles. If seller financing doesn't pan out, there are a number of private investors who may be able to offer a variety of options depending on the situation. The key phrase to remember in securing financing on property such as a mobile not considered real estate is, "Chattel Mortgage." In commercial real estate, this term is typically reserved for a situation where a mobile home is in a park and not occupying its own tax lot. There is an occupancy issue to consider. There is usually less incentive keeping a mobile renter in the park. A tenant owning their mobile is much less likely to move out than a mobile renter. The costs and efforts to move a mobile are often a factor helping to safeguard long-term occupancy for tenants owning their mobiles. There is also an added expense to consider. Any person in a rented mobile is less likely to take care of it. Mobile owners are responsible for the maintenance and repair of the home. When a mobile can no longer be rented due to use, the owner must pay to dispose of it. There are many different benefits and detriments to owning mobiles in a park. Parks can be very profitable when they collect mobile rent on top of pad rent. The determining factor of whether or not to employ this type of rental style park is usually, "How much do you want to put into the project?" If you are looking to get into a property and put the time and work into it, park owned mobiles could be a great way to maximize cash flow - be sure to approach the financing appropriately. For the passive investor who likes to collect checks every month, a pad rent only park is the route of choice - expect to receive the most competitive rates and terms. Colby Callahan Commercial Loan Officer Business Loan Store
