Should You Consider A Credit Union For Your Next Home Loan?

As banks continue to lose their credibility, and loans become more scarce with each passing day, should you consider getting your next home loan from a credit union to score a great deal?

So What Exactly Is A Credit Union?

Credit unions offer savings and checking accounts, accept deposits and provide credit for many different purposes, including home loans and auto lines.  This is very similar to what banks do.

However, unlike banks, credit unions are financial cooperatives that are owned by their members.  They are promoted as not-for-profit organizations that help to build up local communities.  This gives credit unions operating and tax advantages that banks do not have, since banks operate to make a profit.

The American Bankers Association lobbies against credit union attempts to expand their lending abilities because they feel credit unions have unfair competitive advantages already.  Having lower operating costs has allowed credit unions to offer very low closing costs and mortgage rates quite often.  However, because these financial institutions are very loyal to their members, in some situations they might be more conservative with their lending policies.

You might not have considered trying to get a home loan with a credit union before.  However, they have been in the mortgage game for quite a long time.  In fact, while other lenders have been going through hard times recently, from 2006 to 2009 mortgage volume for credit unions increased from $55 billion to $96 billion.

Advantages Of Getting A Home Loan From A Credit Union

Although borrower will basically discover that the same kinds of lending and banking services are offered by credit unions as actual banks, credit unions claim they are the best choices for several different reasons, including:

  • Low interest rates on mortgages
  • No fees
  • Faster closings
  • Personalized service
  • Greater returns on CDs that offset borrowing expenses
  • Better rates for auto loans and other credit products

Can I Find The Home Loan I Am Searching For From A Credit Union?

Although slightly different loan options and programs might be offered by different credit unions, you will discover that they offer a complete range of mortgage products and services for buying a house, refinancing and home improvement projects.

Various conventional mortgage options are also available for borrowers, including 15-year and 30-year fixed-rate mortgages, adjustable rate mortgages (ARMs) of various lengths, government-backed loan programs and home equity loans.  Anything that your local bank offers you can find at a credit union as well.

Why Doesn’t Everybody Get Their Home Loans From A Credit Union?

Despite their tremendous growth recently, a  majority of people still don’t get their loans from a credit union.  Why is this?

Many individuals simply don’t know how credit unions work or may not be aware that they can get a loan for any real estate in Etobicoke, from one.  Also, the loans are available only to the credit union’s members.  For most credit unions, membership is restricted to specific groups.  Industry specific and corporate credit unions are the most popular ones.  However, there are now more than 7,000 federally chartered or state chartered credit unions in the United States, along with an increasing number of community credit unions based on location.  This provides borrowers with many different options to consider no matter where they happen or live or are moving to.

Obviously, the home loans that credit unions offer won’t be the best fit for every borrower.  Not all credit union members will get approved for loans they apply for.

Borrowers should never blindly fall for claims of better deals or slick marketing without shopping around first.  You should always make sure to explore all of the options that are available to you to be certain that you get a fair deal, especially when it comes to the aspect of “not-for-profit.”  Money isn’t just being given away by credit union.

For those who might not meet the conventional loan criteria and need to have underwriting guidelines that are more lenient, along with more flexibility and alternative lending options, or for real estate investors already maxed maxed out the maximum number of loans allowed with one lender, you should continue to look for other options and not give up.

Depending on what your specific situation is, you might want to check into hard money lenders, rehab or construction lenders, or speak with a loan officer or mortgage broker who specializes in helping borrowers who are self-employed or who have documentation or credit challenges.

Equipment Appraisals Can Secure a Business Loan

One of the primary concerns that individuals have when starting a new business or expanding an existing business is bank financing. Did you know that if the lender requires collateral that you may be able to use your existing equipment or machinery as collateral? If you do not have collateral, you may be charged a much higher interest rate. If you own machinery that you can use as collateral, you should contact a certified equipment appraiser. Certified appraisers have the knowledge needed to appraise all of your business equipment. When an appraiser values your items, you can present the appraisal to the bank.

Continue reading to learn how professional equipment appraisers can help your business and your search for the best loan terms available.

It Helps You Determine the Value of Your Equipment

A certified equipment appraiser offers you specialized service to properly value your existing machinery especially big one like metal cutting machines. Banks will accept this appraisal because a certified appraiser will verify the machinery and the value of all of your equipment. This will allow you to negotiate better loan terms, including the amount of your loan, the duration of your loan, the interest rate of the loan and the repayment options.

It Determines the Lifespan of Your Equipment

An expert will be able to determine the lifespan on all evaluated equipment. This can help the bank determine how long your loan will be for. For example, if your machinery has a life expectancy of ten years, your loan repayment loan terms will be in relation to the life expectancy of your equipment. By having a certified appraisal, you can get the best deal on your loan.

Remember: Small equipment like circular saw blades and other related machinery cannot be used for securing finance.

It Helps Certify Your Collateral

A lender will trust a verified appraisal from a certified business valuation service better than other documents. This is because the appraisal report is legally binding and helps the lender authenticate the value of your business equipment and machinery. When you use business equipment as collateral, you will be able to get a loan that is up to the amount of the value of the equipment you will be using as collateral. When appraised equipment is used for collateral, it allows the bank to reclaim the amount owed if non-payment occurs. Having a certified appraisal will help you get the best terms when you apply for a loan.

Appraisals Values Your Equipment Fairly and Timely

When you need to take a loan out for a business expense, time is of the essence. A professional business evaluation service will quickly complete an appraisal of your equipment based on the current market value. This will allow you to take the information to the bank with you when you apply for a loan.

As you can see, there are many reasons to use an equipment appraisal. When you secure a loan with business machinery, you will get better terms, including a better interest rate.

Should You Purchase Or Lease Your Tech Equipment?

When your business is in need of new networking equipment, computers or other technology, should you lease it or buy it? If you aren’t sure, keep reading. We will be taking a close look at both the benefits and disadvantages of both buying and leasing technology equipment, in addition to the questions that you should ask to make sure you receive the best deal.

The Benefits of Leasing

Your equipment stays up-to-date with leasing. Computers and other business internet equipment become obsolete eventually. When you have a lease, the financial burden associated with obsolescence is passed onto the equipment leasing company. For instance, say you have a copy machine that you are leasing for two years. Once your lease expires, you can lease newer, cheaper and faster equipment.

Your monthly expenses will be predictable. When you have a lease, there is pre-determined monthly line item on your books. This can assist you with budgeting much more effectively. According to the results of a survey from the Equipment Leasing Association, thirty-five percent of the respondents stated this was the second-highest benefit to leasing.

You don’t have to pay anything up front. It is common for small businesses to struggle with their cash flow so it is important to keep as as much money on hand as possible. Since it is rare for leases to require any down payment, it is possible to obtain new equipment without needing to tap into much-needed funds.

You can keep up with the competition more easily. Leasing allows sophisticated technology to be acquired by your small business, like a voice over internet protocol (VoIP) business phone systems, that you may not be able to afford otherwise. This results in you being able to keep up with some of your larger competitors better without your financial resources being drained.

The Downsides of Leasing

In the long run you will end up paying more. Leasing will almost always cost you more than buying will. You are obligated to continue paying even if you are not using the equipment anymore. Depending on what your lease terms are, you might need to keep making payments for the whole lease period, even when the equipment might not be needed any long. If your business does change this can definitely happen.

The Benefits Of Purchasing

It is much easier compared with leasing. It is easy to buy equipment. You just determine what you need, and then you go purchase it. However, when you take out a lease, there will at least be some paperwork involved, since leasing companies frequently ask for updated and detailed financial information. You might also be asked where and how the leased equipment is going to be used. It can also be complicated negotiating lease terms. Also, if you don’t properly negotiate, you may end up with unfavorable terms or pay more than is necessary.

When it comes to maintenance you call all of the shots. Often equipment leases will required to keep the equipment maintained according to the specifications issued by the leasing company, and that can end up being expensive. However, when you purchase equipment outright, you get determine your own maintenance schedule.

Your equipment costs are deductible. According to IRS code Section 179, you can deduct the entire cost of recently purchased assets, like computer equipment, during the first year. On the other hand, with operating leases – which as the kind that small businesses most favor – you can deduct your monthly payment only.

The Downsides to Buying

The initial outlay for equipment might be too high. Your business might need to come up with a large sum of money or tie its lines of credit up in order to obtain equipment it really needs. Those funds and lines of credits could be used in other places for advertising, marketing and other function to help expand your business.

You will eventually end up stuck with equipment that is outdated. As previously mentioned, computer technology quickly becomes outdated. An expanding small business might need to update its technology every 18 months or so in some areas. What that means is that you will be stuck with equipment that is outdated eventually that you will need to recycle, sell or donate.

Ask the Right Questions

If you are considering leasing equipment, then you will have to do your homework to make sure you end up with the most favorable terms. The following are a couple of questions to help you get started with the process:

What kind of lease are you being request to sign – an operating lease or a capital lease?

A capital lease is very similar to taking out a loan. With this kind of lease, the equipment is treated as an asset on your company’s balance sheet. You will receive all of the benefits – like tax depreciation – in addition to the risks – obsolescence – that you receive with ownership. Frequently capital leases last up to five years.

When you have an operating lease, ownership is retained by the leasing company, and the equipment is treated as a monthly operating expense for tax purposes instead of a depreciable asset. Overall, operating leases tend to be more popular with small businesses since funds are not tied up and the lease term tends to be short – three years or shorter.

Is a buyout option available?

You might be given the choice between a $1 buyout option and fair market value (FMV) value. FMV means the equipment can be purchased at the end of the lease at its fair market value, which may be hundreds of dollars. By contrast, with a $1 buyout options, the equipment is yours at the time the lease expires for $1. Although that might sound like it would be the best option, FMV lease monthly leases tend to be less than $1 buyout lease payments. Choose the FMV option, if you are reasonably certain you are going to want to upgrade to newer technology at the time that your lease expires.

How long is the lease term for?

Computer equipment leases tend to run for 24, 36 or 48 months. A longer lease term will result in lower monthly payments. However, over time, you will most likely end up paying more with a longer lease term.

Will I be required to insure the equipment?

Some leasing companies will require that your leased equipment be insured. If you fail to do this, fee might be added onto your monthly payments in order to cover insurance.

Can the lease be added to?

A majority of leasing companies won’t mind if equipment is added to an existing lease that you have with them. They will recalculate your lease payment. Usually the lease terms don’t change.

Will I be able to terminate the lease early?

What happens if you don’t need the equipment any longer that you are lease or you need to upgrade sooner than expected to newer technology? Determine in advance if the lease can be paid off early, and if you will have to pay a prepayment penalty (and how much).

There are a couple of basic rules of thumbs that you can use to help you in your decision of whether you should buy or lease. If you have fairly small equipment requirements and have the money available – or have the ability of getting a low-interest loan – buy it. In the long run that will save you money. However, if your equipment needs are substantial, like needing computers for 10 employees, then the better option might be to lease. Why tie up a large sum of cash when that money could be used for growing or establishing your business?

What are the Factors to Consider While Choosing a Realtor?

Choosing a realtor is an important thing if you have any plans for conducting real estate deals which can be either buying or selling of properties. When you are choosing the realtor then there are chances for the individuals to get the best Toronto real estate service. There are certain things that you need to do so that you can get better realtor who can really provide you with the assistance that you expect from them. Here are the various things that you need to do for making that possible so that choosing client can be a great choice from your part.

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Taking with Recent Clients

It is necessary for you to ask agents for providing with the lists of the properties that they have sold and also made the clients to buy that. This is the information that you can use so that you can know the recent clients whom they worked with. You can contact them and get information regarding the service of the realtor. You should also know how long the property is there in the market for sales. This is the factor that can determine the price.

License

All the states have got their own authorities through which the realtors are licensed. You need to check with the regulatory board in your state so that you can find out whether the realtor that you are planning to hire for buying a house is licensed or not. You also need to ensure whether they have got any complaints against them or any disciplinary actions are taken on them. Some states have their websites in which they post the details related with those realtors who have got complaints or disciplinary actions taken against them.

Choosing Winner

You need to choose the realtor try to pick the one who has won some awards for providing the best services in the niche. It is always important for you to choose the realtor who is good with the services that he provides. In such a concern you need to choose the realtor who has won some awards. Most of the state authorities usually choose such realtors who are good with their work. You just need to refer with authorities and then choose the winner in the particular place so that you can be sure of getting the finest service and thus the best house possible.

Consider the Commission

It is necessary for you to check whether the realtor whom you are choosing for the particular deal is someone whom you can afford. You can ask directly to the realtor about the commission or the charge that he gets from the clients for selling Toronto condos. You need to choose the realtor based on the commission that they offer. If the commission or the charge incurred by them is too huge then you can better choose someone else whom you think you can afford.

Experience

It is always good for choosing a realtor who has been there in the business for such a long time. They have good contacts and can help you out in choosing the bets home for purchase.