Finance

What Are FHA Loan Qualifications in 2012: How to Get it Easily

Posted by Scott Wilson on in Finance 0 Comment

The FHA loan qualifications 2011 been lenient quite a bit to allow first time home buyers as well as others to obtain low cost loans that are backed by the FHA (Federal Housing Authority).  Originally, these loans were used to help those who were first time home buyers get homes.  Today, the requirements are more accommodating than ever before for those who want to buy a home.

Who Can Get an FHA Loan?

First time home buyers can obtain an FHA loan if they fall below a certain income.  The income requirements for the loans vary from state to state but generally, those who make below $60K can qualify for this type of loan.

  • You can also obtain this type of loan if you have a less than perfect credit score.  Unlike conventional mortgages, these loans are backed by the federal government and enable those who are buying a home for the first time or those who may be buying in a certain location, to get a loan.
  • Single parents may qualify for an FHA loan even if they have purchased a home already.  In addition, those who have had previous FHA loans can also use this program to get another loan through the FHA.

What About Credit Issues?

  • Those who have declared bankruptcy can get an FHA loan after two years upon the discharge of the bankruptcy.  This is more lenient than conventional loans, which require people to wait 10 years after the bankruptcy has been discharged to apply for a loan.
  • Poor credit is fine with an FHA loan as they cater more to those who may have credit issues.  Check with an FHA lender in order to see if you qualify.  Do not let a low credit score prevent you from buying a house.

Benefits of Acquiring an FHA Loan

  • Low down payment: You only have to put down 3.5% today for an FHA loan.  This amount has been decreased from prior years where you had to put down 5% of the purchase price to get this type of loan.  Even those who do not have a sizeable down payment can thus qualify for an FHA loan.
  • No closing costs: The FHA loan requires that the seller puts up the closing costs for the loan instead of the buyer.  This saves the buyer even more money.
  • Low interest payments: FHA loan interest varies from state to state, but is generally much lower than that of a conventional loan.
  • More options with regard to paying back the loan: There are some FHA loans out there that have a 40 year payment plan, as opposed to a 30 year, which is usually the maximum for a conventional loan.

What Type of Property Can You Buy?

  • Property must be FHA approved.  This means that it has to pass inspection by an FHA inspector in order to close;
  • FHA properties can be located in just about any area.  They consist of both single family homes as well as multi family dwellings.  As long as the owner is willing to go FHA, they can sell their home to an FHA approved buyer.

With so many people looking to sell their property, FHA loans are making quite a comeback.  You can find an FHA lender by going online as well as see if you qualify for a home loan.

Opportunities and Plan to Start a Tax Preparation Business from Home

Posted by JC White on in Finance 0 Comment

If you do not have a good relationship with the numbers or you are not especially keen on counting, then the big question of the yearly personal income preparations ticks in your head when the deadline gets closer.

Some ask their accountants or one of their colleagues working in the economical department to make their tax preparations. Some who are especially keen and have their many friends, colleagues for whom they have already made their tax preparations can think about starting their own business in this. Tax preparation is a very important paper and if you would like to have such business, you will need to certify your degrees in finance or economics first in order to be the head of your company according to the laws of most countries. It is great if you already have your accountancy degree beforehand.

Instructions to Start and Setup Your Own Tax Preparation Business

  • Many countries will only allow you to make a business with such financial profile as a financial diploma. If you do not have one, you will need to get it. In case you are not one of those who have made tax preparations before, then you must enrol in a course where you can learn it all and get a degree. Most business that makes tax preparations are accountants. If you also work as an accountant, it will bring you a lot more income as every business needs an accountant. Even you do!  If you are allowed to do a business first without the necessary examinations, then you can make the company and then deduct the expenses of your course from your tax.
  • You need to research. The best way to make such business is, if you have previously done the income tax preparation for friends and family. In this case, you have a starting clientele, which is a huge gift for a starting business. When you grow bigger, you can also take over the accounting and tax presentation of companies as well.
  • You need to go through all the official procedure that is necessary in your country in order to establish your company. These mean a lot of papers, lawyer and state offices.  You must make these sure in your countries and district’s state offices.
  • When you have your company papers, you must need to get your tax identification number. The tax is prepared in either an office called Internal Revenue Service or any state tax office that does the job in your country. For knowing this, you can freely search the internet to get to know all the requirements and taxpaying obligations, which is anyways obligatory in your profession. Tax number work as the main identification for a company and it is a must-have for a business.
  • You will need to have your own office. Even if it is a separate section of your house with separate entry, you must make it look attractive. You will need to welcome people; in fact, it is necessary for the business. You will need to take care of all the office tools, all of which you can write off later from your business tax. There will be need for advertising eventually and you must design your company logo and your layouts. You will need your business cards.
  • Just go systematically and be patient although do not lower your expectations.

These are the main steps for making the first steps and progress toward having your own tax preparation business. Do not give up your dreams and the truth is that most people fear of making their own tax preparations because they are not good at the numbers. So be brave, go for it, it is not hard to make such a business and you can make your dreams come true, with the establishing of your own company.

How to Find and Easily Convene Investors to Start a Small Business

Posted by JC White on in Finance 0 Comment

The ideas come easily but the money mostly does not. It is a grand question whether your idea sells or not on your behalf. However, if you want to use your idea yourself for your start-up business, then you must be very smart and very eager. You must learn a couple of things, as investors do not come easy, they decide according to your description and your seeming credibility.

How can you find investors for your start-up?

Here are some ideas and steps on the best way on how to find you investors:

1. Who

The first question is always on the person and quality of the investor:

  • Family – Many people turn to their families first. However, you may lose your family’s trust if your idea comes out wrong. It is an understandable step, so better not put out your family to all the procedures and end up with a bad relation and loss of trust when things turn out not the way you want to see.
  • Friends – Friends are the second step for most people. But there is no business in friendship,
  • Companies – It is the clear solution yet it is the hardest solution.
  • Foundations – They will expect you a lot of paperwork and talk. However, a foundation is sometimes better than a business itself because they work mostly non-profit.
  • Eventually the differences will come out and they will for sure damage, even ruin your relationship. Borrowing money from a friend is a very risky business.

2. How

  • You will need a lot of paperwork. You will need to describe and represent your idea in the most the impressive way. You will need a very good business plan with very attractive promises of business and income for the company, which lends you. It will take your time and the lender may turn you down several times in the beginning. Yet you should not give up. In addition, you must make yourself the key person in the presentation and you must not describe the whole idea; otherwise, the chances are that someone might steal your idea and profit from it.
  • Offer great chances and the growth of respect toward the company, which will help you. Make them feel that they will profit a lot from this business.

3. When

  • The best time to turn to a company is when they are on the top or when they are famous to support other companies, sports events or charities. The main profile of the company is not interesting. If they are big enough, you may start negotiating with them.

4. Credit contract

  • Be careful with this, as they can turn to being very cruel. Choose long haul and choose a contract, which does not talk about exclusivity in any way concerning any rights. Make it long haul and do not forget about a life vest in case things do not go as you felt like. Have a lawyer with you when making any sort of contract.
  • Finding investors is not easy but once you are managing, you have another success, that you have made yourself known to many people. Your network is very important in a business. Be credible and do not forget that all is business, the money they give is no gift, but anyhow you will need to pay it back in your best power. You must think of many things. Many people make their company before actually looking for an investor saying it is a good legal step to do so.

How to Get Non-Recourse Financing: What Are the Risks and Liabilities?

Posted by Scott Wilson on in Finance 0 Comment

If you have never taken out a loan for a rather large purchase such as a home, then you may not even know the difference between recourse and non-recourse debt. It is important to keep in mind the varying points and also the risks and liabilities of non-recourse financing. Many people are taking out loans to purchase their homes and if it is your first purchase then learning basic knowledge about non-recourse loans is important.

What does Non-Recourse Financing Mean?

Non-recourse financing and subsequent debt is where the lender which is probably the bank is only entitled to pursue for the collateral or the project in which the loan is possible. There will be now lawsuit ensuring for additional damages. You are only liable for the collateral which may still be a great deal for you but if the bank does not recover all of their losses, at least you cannot be held responsible for it. Non-recourse financing is usually for long term loans like buying a house, high capitals purchase etc. Taking a good look at each of them can sometimes require a professional’s advice or guidance.

What Are the Risks of Non-Recourse Financing?

Non-recourse financing is usually of higher and varying interests in comparison to recourse loans. So defaulting on repayment of the loan will cause you to lose the property completely and it does not matter how much you had previously paid for it. The only good factor is that if the house sells for a significantly lower amount, you will not be held liable in any way or form to recover those losses for the lender. It is only beneficial that the taxpayer would be forgiven in terms of ordinary income that is taxable.

What Are the Liabilities of Non-Recourse Financing?

Bsides from losing any collateral and real property in the event of a default of payment, there are also requirements for purposes. Non-recourse loans can help to ensure that you will not have any liability further except to give back the collateral and real property that the loan was originally taken out for. While there will be no lawsuit to follow any default of your lack of payment, it will be required to report a capital gain on the difference that was not paid. Consult your tax attorney or look online for more details that can help with your decision.

How Women Can Get Micro Business Loans or Finance in United States

Posted by Scott Wilson on in Finance 0 Comment

Micro business loans are usually for those who have low income and stay in economically disadvantaged areas where it may be more difficult to start, promote, and operate a business. More than just a financial arrangement, micro business loans are more of a movement to create a chance for the less fortunate to gain. Economic inequality decreases with the help of micro finance.

Micro Business Loans and Financing for Women

What are the Benefits?

For those who do not have accessible bank institutions or financial establishments in their locality can significantly benefit from receiving micro business loans. Even if a bank is located within your jurisdiction, they are not likely to lend any amount of money to those with little or zero cash income. Ultimately, banks invest in your business and if they cannot substantiate any profit in the end, they will not approve a loan for any small business. In addition, banks have more upkeep costs with trained professionals who are available to handle loan accounts. So if the time is the same for a small or large loan, they will naturally prefer to deal with larger amounts as opposed to wasting time with smaller ones.

Micro Business Loans Give a Real Opportunity

Banks will only consider giving a loan when there is at least some reasonable and steady income, or there is some sort of asset or collateral that can be put up for insurance to cover any possible default in payment. But this is almost never possible for those with low income or no basic knowledge on finances. A great opportunity can be presented by micro business loans and for those who do not have any knowledge about out a loan.

Who Can Benefit from Micro Business Loans

Women can also gain benefits from micro business loans because of the great opportunities available to them. With so many more women earning degrees, building careers, and starting more businesses, there are also loans that can be beneficial without overly high interests that can setup a business for default. The purpose of the micro business loans is to provide a better and fair chance for those who are not in the same position as those more fortunate, to earn a means of living.

Missions of Micro Business Loans

The ultimate missions of starting the concept of micro business loans is to help with economic development on a wider scale than just big bully corporations that make it difficult for small businesses run by women. These types of loans can help the less advantaged groups to gain an opportunity to improve their livelihood and that of their communities as well.

How to Apply and Get Federal Grants for Women to Start a Business

Posted by Scott Wilson on in Finance 0 Comment

There are many businesses started and run by women and because of this, there are grants available to get a kick start for your company. There are a few private and not-for-profit organizations that award grants for starting up your business. There can be some rare loans from the federal government but there are usually strict limitations and conditions to be met.

Types of Grants Available for Women Starting a Business

There actually are two types of grants that are available to women who are looking to start a business. The first is a grant from the government, which are usually limiting and restricted to certain women. The second type is a private grant which can be available through the Women’s Financial Fund and can range up to $5000. A government grant is different because they are traditionally reserved for minority women or those who are in economically poor areas. This process is assisted by the Small Business Association (SBA) which is an organization that can help women to locate such grants. The restrictions of government funded grants have built a common misconception about how easy it is to get simply because you are a woman. But the limitations may automatically exclude you even before applying. There are other grants that can apply to your business but there are things to remember when putting a request.

What to Consider When Applying for a Grant to Start a Business

There should always be a detailed business plan ready when applying for a grant to start your business because this shows dedication and genuine effort to put hard work into the establishment. Even if planning or writing skills are not your best areas, you can consult a financial advisor. There is help out there if you wish to write a persuasive and sincere grant request to get your business started. Also make a visit to your local SBA office and inquire about the grants that are applicable for your circumstance. Be wary of promising services or online advertisements that boast free money from the government because you may get scammed.

Federal Grants Most Likely Too Good to Be True

While there are many women looking for federal grants to start their business, there will be more scammers who claim to have the solution to get you that loan. But actually, due to the limitations on such “free government money” there is not much weight in that rumor. The best way to apply for a grant is by having a clear and reasonable plan ready to present to any location the Small Business Association may refer you to. However, if you are starting a business in economically disadvantaged area or are a minority, then a government grant could be the perfect benefit to start your business.

Difference Between Recourse Vs Non-Recourse Loans, Debt Or Financing

Posted by JC White on in Finance 0 Comment

There are many who are not aware of the difference of recourse vs non-recourse and could benefit from some basic knowledge about the liabilities of each one. Recourse debt gives the lender the ability to come to you personally for payment. Non-recourse loans include a bigger risk for the lending party and it is important to learn how to tell the difference between the two. Usually the state you live in will dictate laws as to whether a particular loan is a recourse or non-recourse one.

Points of Variance in Recourse vs Non-recourse Loans

There are points of variance in recourse and non-recourse loans in that the liability is different and the lender can pursue only to a certain degree for non-recourse loans. For example, if you are buying a house and borrow money for a house then do not make your payments, the bank can only foreclose instead of going after complete damages in the event the house does not sell for any profit or make the lender whole again. There is nothing the bank can do to sue you for other damages because in a non-recourse loan, they can only take the collateral if you default on the repayment.

Though this arrangement may be riskier for the lender and appears more beneficial to the borrower, it will most likely incur a higher interest rate than a recourse loan. Making the correct decision would be important because of the liability involved. With recourse debt, you will be personally liable if there is a default on the payments and any collateral will be taken away and more problems will follow if the loan is not repaid in full. The taxing process is also different because with recourse debt, you are actually paying for a purchase that just so happens to be a loss, but is still taxable.

Recourse Debt vs Non-Course Debt Taxing Differences

With a non-recourse debt, there is actually no debt so forgiveness will not be required and does not have any effects on the borrower’s reported amount of income. But there is a gain and loss requirement for the tax purposes, which is calculated by using the amount of debt and deducting the fair market value of the asset at the actual time of repossessing. Any amount of gains that are made by the borrower will need to be included in the reported income and will be accounted for when calculating tax liability. But any losses still cannot be taken from the income amount.

Making Your Important Loan Decision

For your individual circumstances, you should get advice from your tax attorney, friends, or family if they have been in the same position before. Getting into a loan that is not right for you can cause more possible risks and subsequent defaults. Making a bad decision with a loan can affect not only your future finances, but will involve either forgivable or taxes that need to be reported. No matter how sure you are that you can repay that loan when you sign up, it is still smart to find out the differences.

Using 401K to Start A Business: How To Use It to Become Self Employed

Posted by JC White on in Finance 2 Comments

Starting up a personal business is a challenging experience that involves much risk, a great deal of financing, and help from experts knowledgeable in the field of business ventures and especially in helping entrepreneurs.  Getting the financing needed to start a business is one of the greatest challenges, but there are ways to help get the financing needed by using your 401K.

Become Self Employed and Start a Business Using 401K

Choose Your Business Carefully

  • The type of business you decide to start is an important factor in your success rate.  Think of things that you enjoy doing and that you have some knowledge in the area.
  • Research your business ideas to see if they are feasible in your area as well as in its market niche.

Build a Business Plan

  • Putting together a business plan is very important in starting and maintaining a business.  The business plan will include all of your financial information including bank statements, tax records and contact information for bankers and other financial institutions you are doing current, past and future business with.
  • The business plan allows you to project the earnings for five, ten and even fifteen years down the road as well as the costs expected to keep the business running.  This is important if you are looking at getting investors, other than using your 401K, to help finance start up fees.

Consult the Right Professionals

  • To make sure that you will not incur any extra fees, taxes or other obligations, it’s important to consult professionals to advise you and put you in the right direction.
  • A tax attorney is important to make sure that you are transferring your 401K correctly so that taxes are not withheld.  They will also be able to help you in allocating the appropriate funds for the business.

Using Your 401K for Funding

  • Once you have done your research and have decided upon the type of business you want to start, it’s time to start up your own corporation.  Once you have set up a corporation, put yourself in the corporation as an employee with 401K benefits. Be sure that you set yourself up as an administrator so that you can have privileges and the ability to make decisions and invest the 401K.
  • When you are set up in the corporation as an employee with 401K benefits, you can then transfer – or roll over – your 401K into the new business.  This prevents you from being charged early withdrawal fees and other taxes that you would have to pay if you simply withdrew your 401K funds instead of investing them or switching them to another company.
  • Now you can use the 401K funds as seed money to invest in your new business.  The funds can be used as an investment to procure equipment, employee payroll and other seed monies needed for startup.

It is important to make sure that you understand the workings of the 401K before you use it to start up your own business.  Be sure to contact a tax attorney familiar with 401K investments first so that you are protected and do not get taxed for early withdrawal.

Hard Money Loans for Bad Credit: How to Find Private Money Lenders

Posted by JC White on in Finance 3 Comments

Whether you have no credit or bad credit, finding someone to lend you monies you may desperately need to make home repairs or other necessities can be quite an ordeal. In today’s society with the economy the way it is, it is hard to find someone who doesn’t have at least one little mark on their credit score against them. This doesn’t necessarily mean that they didn’t want to pay off their debt, but that circumstances prevented them from making good on their debts and financial responsibilities. Because of their credit situation, it is now difficult to find a lender willing to help rescue them financially. This is where hard money and private money lenders can come in handy to help out in times of financial need.

How to Find Private Money Lenders with Bad Credit

Hard Money verses Soft Money Loans

  • There are differences between hard and soft money loans that you should be aware of if you are considering a loan.
  • Soft money loans are usually provided by banks and other institutions. These loans usually require at least a thirty day waiting period and credit checks. Interest rates may be higher or lower depending upon your financial credibility.
  • Hard money loans are provided by individuals, like you and me, using their own cash availability. Hard money loans are meant for people who cannot get credit because they don’t have any credit built up, or because they have bad credit and have troubles getting loans and credit anywhere else.

Understanding Hard Money Loans

  • Consider where the loan financing comes from in hard money or private money loans. The financing comes from an individual person who is putting up their own cash stores to loan to you.
  • Hard money loans, because of where they come from, are usually more restrictive. This doesn’t mean that it’s not possible or too difficult to get a hard money loan, just that there are a lot of restrictions on them. A hard money lender will probably scrutinize your assets and financial credibility a little closer than a soft money lender. However, unlike soft money lenders, hard money lenders have the ability to decide based solely on their feelings about you as a person. A soft money lender may like and even believe you well enough, but will still be required to turn down your loan if it doesn’t meet the bank’s or other institution’s loan requirements.
  • The consumer laws have changed so that consumers are more protected than they used to be. In earlier times, hard money lenders could lend money knowing that if you didn’t pay they could easily take your home and other assets. With protective consumer laws in place now, this process is not nearly as easy as it was, therefore hard money lenders must be somewhat careful to whom they lend money to.
  • Typically, hard money lenders will loan up to seventy percent of what your home is valued at when it is in complete repair. In other words, if you are renovating your home, the lender will look at what the home will be worth when in complete repair and may loan you up to seventy percent of that value.

Business Loans and Start up Grants for Veterans with Bad Credit

Posted by Lili on in Finance 0 Comment

Veterans of the armed services who want to start up their own business are at an advantage as there are many resources open to them regarding how they can get business loans for veterans. Those who have served their country have resources that they can tap into in order to come up with the money that they need to start out a new business as well as maintain or even grow a current business that they own.

How to Get Business Loans For Veterans?

In order to learn how to get business loans for veterans, follow these simple guidelines:

Seek Out The Veterans Administration

  • Check out the benefits that are available to veterans through the Veterans Administration.  This can help a vet get the money that they need to start up a business with a low interest loan.
  • Seek out veteran support groups for low interest loans. Certain groups that are designed to help veterans would rather give them a hand up than a hand out and can be more than willing to help those who want money to start a business or retain their existing business that will, in turn, not only help them but others.
  • Hire veterans and others who are looking for work.  Businesses that make it a practice to hire veterans as well as those who may have a difficult time attaining employment through traditional means can find grants as well as other monies that is needed for their business.

Seek Out Government Grants 

  • Look for federal grant money that is used to help veterans.  This money can be used for businesses that are not only owned by vets, but also by those who hire veterans of the armed services.
  • Check into local grants and low interest loans that may be available through the state or local governments.
  • Check traditional lending institutions, such as banks, to see if they have funds for veteran loans.  Many of them will be able to work with veterans so that they can achieve low interest loans.
  • Do not discount credit card lending for veterans.  Many of them offer low interest rates and can be used for small start up costs for a business as well as to help any business thrive.

Have A Business Plan

  • It cannot be overstated that any business, regardless of who owns it, should have a solid business plan, including a marketing study, so that they can present their case for a loan.
  • Present the business plan as well as necessary financial statements for the business to those who may be interested in helping the company, such as local and even non-local investors.
  • Have a marketing study performed as to the viability of the business and how the money that it borrows can help it turn a profit and thus, repay any loans offered to the business.

Veterans who are looking to succeed in their own business should tap into all of the resources available to them, including the VA, so that they can attain low interest loans as well as grants to make their business a success.  In addition, those who plan to hire veterans as well as others who may have difficulty getting a job can find many avenues open to them when it comes to federal as well as state grants designed for small business use.