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Which Type of SBA Loan is Right for You?

Categories: Informational
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Business loan being selected on a virtual optionSBA loans are issued to help small businesses get off the ground, expand or stay afloat. Guaranteed by the government, these loans offer debtors low-interest rates and flexible loan terms.

Many financial service providers in Ogden like the Wasatch Peaks Credit Union offer different types of SBA loans for your business needs. The three primary SBA loan categories are the 7a, 504 and microloans. These loans differ in terms and conditions, and finding the best type for you is paramount to the success of your business. That said, below are some factors that will influence your loan choice:

Your credit score

As a small business proprietor or someone looking to start or expand a business, you should aim for a high personal credit score. Lenders take into account the credit score of anyone with at least 20% interest in any business before giving an SBA loan. The 7a and 504 loan programs require borrowers to have a minimum credit score of 700. You may get microloans with lower credit scores, but they might attract higher interest rates.

What you intend to use the loan for

If you are looking for a loan to pay for your workers’ salaries, buy equipment and property, the 7a loan is the ideal option. For long-term needs like land and buildings, and business expansion projects, the 504 loan will work for you. You can use microloans for various business purposes but not for property purchase.

Your lending institution

Both the 7a and 504 SBA loans are processed through credit unions, banks and specialized lenders. You can borrow up to $5 million under these programs. The microloans are managed by community-based non-profit organizations. You can borrow up to $50,000.

The application process for SBA loans is quite thorough. You should pay close attention to your application details and ensure you have all the necessary documents. Your business plan also determines the success of your application. Ensure your plan is solid and well researched.


How High LTV Can Keep You From Refinancing Your Mortgage

Categories: Marketing & Sales
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Mortgage Refinance in Utah

Mortgage Refinance in UtahAs interest rates in Utah are at record lows, many homeowners are keen to refinance their mortgage as soon as possible. This is generally a sound move, particularly if you have no plans to sell your house and change residences in the near future. With a much lower rate, you could save thousands of dollars over the lifetime of your new, refinanced loan.

But just because you want, you can get. A refinance is technically a new mortgage, which you must apply for first. Even if you have qualified for a home loan in the past, it doesn’t necessarily you can qualify this time around.

In many cases, mortgage refinance applicants are denied for different reasons. Of all culprits, a high loan-to-value ratio, or LTV, is the most notorious.

You are a Big Risk

If your LTV is well above what lenders consider acceptable, expect a lot of doors to close. This is because a high LTV means you lack enough equity on your property. The smaller ownership you have on your home, the lesser inclined you are to keep paying — at least in the eyes of lenders.

More often than not, having a high LTV (or worse, negative equity) could single-handedly lead to denial.

You Have to No Option but a High Interest Rate

If you’re lucky, some lenders would still agree to let you refinance your mortgage in Utah — for a steep price. Because you have less equity at stake in the deal, industry expert City Creek Mortgage explains that you’re subject to a higher rate.

This might defeat the purpose of your refinancing in the first place. Instead of saving you money down the road, the new mortgage might do little to lower your expenses, and only reset the clock with a fresh term.

You Might Have to Keep Your Current Loan

The magic number is 80%, so if the appraisal shows that you are yet to own 20% of your property, you might have to count more months of repayment to bank enough “ownership”. Until then, refinancing your mortgage would remain a dream beyond realizing.

Fortunately, there are financial products that allow you to refinance despite your equity problems. The key is to speak with an experienced broker to discover and access these mortgages.


Keys to Avoiding Bad Mortgage Recommendations

Categories: News Around
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Mortgage in Salt Lake City

Mortgage in Salt Lake CityWhen you shop around for a mortgage, you’d meet two kinds of people: those who’d sincerely help you get a suitable deal for your situation, and those who’d rip you off the first chance they have.

At first, it’s impossible to tell who’s honest from who has malice, which is why you can only rely on yourself to figure out whose advice to take. Regardless if it’s your first time or not, you can avoid falling victim to bad recommendations by being diligent.

Familiarize Yourself with the Terms

Lesson number one is to learn how to speak the industry language. Many home loan borrowers agree to whatever is told to them without fully understanding what they really mean. Some deals look desirable at the surface, but actually costs more at a closer inspection.

The mortgage industry is full of fancy terms that’s confusing to average borrowers. Also, some lenders apply certain fees you wouldn’t hear from others. Point is, there’s always a reason for that. More than terms, you must understand the concepts behind every element in the deal to see the whole picture.

Do Some Legwork

Other than the basics, you should do a quick research on the company you’d be dealing with. By all means, every mortgage lender in Salt Lake City, Houston, Boston, or any city would put their best foot forward to attract business; but not all of them aren’t really what they seem.

Look for reviews on legitimate sites, and read what their clients have to say about them. Fact-check whatever they claim to see if what they boast really holds true.

Make Sure Everything’s Clear & in Writing

Lastly, words doesn’t mean anything unless they’re in black and white. Many lenders would promise you the numbers you want to hear, but wouldn’t deliver. You must lock it in to make the deal official.

Hear all the deals banks and brokers have to offer, but take every single one with a grain of salt. As you look for a mortgage officer you can trust, make yourself informed to avoid falling prey to anybody.