Since your home, just like your investments, builds your retirement nest egg, your strategy should include how much extra you wish to pay on the balance during the period of the mortgage. As the baby boomer generation rolls into retirement age, the prospect of living on social security and retirement income has caused many to consider other sources of retirement funds. The biggest asset many find to leverage is their home. There are several methods to consider in order to access your home’s equity, the guide below helps you see how each real estate strategy may apply to your retirement situation.

Real estate strategies include:

• Paying for a smaller home with the sold home’s equity and possibly provide extra cash;
• Getting a reverse mortgage; and
• Moving to a region where cost of living is less.

A variation of these options is if you downsize, pay for your new home with the proceeds of your old home and then get a reverse mortgage. With both strategies, downsizing and reverse mortgage, building up equity in the house (and keeping up repairs) positions you for the best use of your asset. For figuring how much your home will be worth at retirement age, figure a 5.5% increase in value (barring situations where your neighborhood goes downhill). With the ups and downs in the housing industry, the home value increase is usually in the 5.5% to 6% range.

Consider a reverse mortgage. A reverse mortgage is a loan that allows homeowners to convert a portion of the equity in their home into cash. Unlike a traditional fixed or adjustable rate mortgage, a reverse mortgage has no monthly payments. Part of the cash goes to the owner and the rest goes to the lender as a prepayment of the interest. The cash the homeowner receives is usually around 60%. As long as one of the borrowers lives in the home, the home can not be sold by the lender or foreclosed. For HUD’s FHA loans, you must be 62 years of age or older and fully or mostly own a single-family residential house, an apartment, condominium or townhouse. Some manufactured homes may also meet the lenders standards.

The benefit for retirees is that the home’s equity largely determines home loan eligibility, not income. The homeowner does not have to move or make mortgage or rent payments. For an FHA backed loan, you must attend a counseling session to determine if this is the correct loan for your retirement situation. A benefit for retirees is that they can receive their cash as a lump sum or in monthly payments. Though these payments may affect your Supplemental Security Income and Medicaid payments, they are not taxable. The mortgages do not establish an escrow account for insurance and taxes – those remain the responsibility of the homeowner.

US Business Finance Corp helps homeowners who are downsizing or moving to increase the buying power of their income.  Our team of professionals will make sure that they grasp all your real estate needs and concerns before offering the financing options that best suit your needs. Contact our mortgage team to review your real estate financing solutions.

At US Business Finance Corporation, our success is only assured by our team of professionals’ ability to help you with your home financing and small business funding needs. We will make sure that we understand all your real estate needs and concerns before offering the financing options that could best fit your needs. Contact our home finance team to review our residential real estate refinance solutions.

First, take stock of your current mortgage:

• Is there a penalty for early pay-off, and how much?
• Would your new interest rate be 2% or more less than your current interest rate(s)?
• If you have a variable rate loan, is there a clause that allows that mortgage to easily be turned into a fixed rate?

Next, is the long-term savings is worth the upfront expenses? How many months of savings on the new payment would it take to pay for the new closing costs? For example, if your savings is $200 a month and closing costs are $2,200, it would take 11 months to hit the break-even point. If you plan on living in your home for several years to come, then a new home mortgage makes sense.

Third, talk to your current lender first if a home loan refinance looks beneficial to your finances for two reasons: they have much of your financial information already and you may be able to save on your closing costs and interest rate.

A refinance caveat: If you are considering a refinance to pay-off credit cards, make sure you also address the underlying situation that built up the credit card debt. Too many homeowners have leveraged their home equity to pay off high interest debt without addressing their monthly spending habits and rebuilt their debt within a few years.

Finally, following the “Get Ready For Refinance” exercises of reducing your debt-to-income ratio and credit card balances to improve your credit score will always benefit your overall financial health even if you do not refinance.

First, use the freecreditreport.com website to check your credit history with the top three credit bureaus. Make sure there are no incorrect entries. If there are accounts that show late payments, or if you have a general history of making late payments, do everything you can to give yourself a 6 to 7 months with no late payments.

Second, create a strategy for your credit cards that you have balances on (or for any active installment loans),  that will:
- Reduce balances on each credit card to below 50%;

• Pay-off any small installment loans and keep any revolving credit cards from gas companies or department stores paid off at the end of the month;
• Reduce your installment loans to one or two (includes mortgages and car loans); and
• Take the steps necessary to reduce the number of your credit card to the 2 or 3 that offer the best interest and lowest annual fees.

In positioning how much balance to have on your credit cards at the time of your loan application, keep in mind the overall level of debt (all car, home, credit cards and appliance loans).

Lenders review your debt-to-income ratio as well as credit score, since the main buyer of mortgages on the secondary market will not accept loans to borrowers whose debt-to-income ratios exceed the Fannie Mae limits. The mortgage (principal and interest) to gross income should be 28% or lower. Your overall monthly debt payments to monthly gross income ratio should be 36% or less.

Third, go to optoutprescreen.com to opt out of free credit card offers. This step both shields you from temptation and improves your credit scores.

Finally, follow your game plan, putting into place the disciplines necessary to carrying out your mortgage rate improvement strategy successfully.

Remember the benefits or your program: Your better credit score reduce both your interest and the amount of your down payment if your credit score was lower than the Fannie Mae levels. With a lower down payment, you may be able to afford a larger home or to live in a more desirable part of town.

Several benefits that military personnel receive with these loans are:

• The interest rate on loans for less than seven years is only 2.25% over prime;
• Loans for under $25,000 do not require collateral (although lenders can charge an added 2% on these loans); and
• The SBA approval time is 36 hours (versus up to 10 days on regular SBA loans).

The Patriot Express program guarantees 75% of the loan for amounts up to $500,000. Since the SBA program relies on the lender’s application forms, businesses with a 51% or greater military vet or active-duty ownership can simply go to your local financial institute that works with SBA loans.

For veteran-owned small business, US Business Finance Corp offers its Business Cash Advance program as a possible adjunct to a Patriot Express loan to help new businesses get their financing in a timely manner. With a business cash advance, veteran owned small businesses can access business financing that performs as a draw against their future credit card sales. Unlike a bank loan, US Business Finance Corp historically wires approved business owners the cash advance in 5 to 10 business days.

If your veteran-owned small business is too new or your collateral position not what it needs to be for an Patriot Express SBA loan, contact us to see what small business financing we can arrange for you. We are specialists helping new businesses secure the funds they need when they need them most.

1. Just as in marketing, determine you target market. If your define your target market by demographics, you can research the US Census Bureau’s website to get information on where most of that target demographic resides in your town or metropolitan area.

 

2. Once you have used your target market research to determine where your market is, check where businesses that are similar or a competitor to your business are located in that area. It is no mystery that doctors’ offices are usually in the neighborhood of a hospital and lawyers’ offices are within blocks of the city or county courthouse. In this way you can utilize the marketing research and selling experience of the successful companies.

   Another aspect of locating near competition is that your companies draw from the employee group that has the same skill set. Local incubator companies and state and federal labor offices often have the information of the areas labor pools and markets.

 

3. Consider the transportation aspect. Will you be receiving deliveries from semi-trucks and need to be near a major street with an alley, or just off the interstate? Are most of your employees going to be using mass transit – need to be near bus/train lines? If you are opening a second store, is it in a similar area and easy to get from one store to another? Consider the situations where you have to handle an emergency or will be making regular trips between stores.

 

4. When price is an over-riding consideration. Businesses that either deliver a service to the customer, such as well drillers, or that deliver their product electronically, such as a software business, do not need to be in the “high rent district”, but can find the locations with very affordable rent or purchase prices, such as unused warehouses (and then get creative on interior design).

 

5. Choose your location for year-round residency in mind. Keep in mind winter conditions which will affect the expense of heating your office or store. Buildings with multiple retail or office spaces allow for  sharing certain expenses, such as snow plowing the parking lot, with the other tenants.

 

6. Use the knowledge of your real estate agent. It is always good to know the history of a building and the neighborhood – what businesses succeeded and which ones failed and why. This can help you from repeating another business’s same mistakes.

Every new business faces challenges, however, by choosing a beneficial location, you have overcome one of your company’s biggest start-up tests and placed yourself in the best position to succeed. When you locate your commercial property, turn to US Business Finance Corp for your best avenue to obtaining a commercial real estate loan. We have the experience and mortgage industry network to find you the financing you need.

Cash advances are a great alternative business funding program in which US Business Finance Corp specializes. This unique option offers business owners funding that does not need collateral or receivables to cover it. The advance is paid back through future V/MC credit card sales.

You are probably familiar with personal home loans using the owner’s real estate equity as a traditional way to raise capital. The drawback of the personal loan is that if the business fails or goes through a rough patch, the owner’s home is then at risk. Cash advances and other methods of business funding offer protection for the owner’s personal assets, while still providing the necessary operating capital.

For larger capital needs, US Business Finance also helps business owners secure business loans and Small Business Administration (SBA) loans. SBA loans are guaranteed to a certain percentage of the loan by the federal government, so they have a slightly higher interest rate than a standard business loan.

Another loan program business owners can use to build equity in their business is a commercial real estate loan. US Business Finance helps businesses not only apply for a commercial loan, but helps them create a business presentation supporting the application and utilizes their network of lending institutions to give business owners the best possible chance of success landing their commercial mortgage at the best terms.

Accounts receivables and factoring are similar programs that offer business owners a way of collecting business funding at a discount by either pledging their receivables as security, or selling their receivables outright in factoring.

Let the professionals at US Business Finance Corp go over your specific business funding needs and apprise you of how each of these funding options can be used in your business and help evaluate which ones best fit your immediate and long-term needs. US Business Finance is dedicated to helping small businesses achieve financial success by providing them with the best business funding solutions. Contact us for the best service and programs for all your business funding needs.