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Mortgage Rates
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30 yr fixed:
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5.77%
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15 yr fixed:
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5.15%
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1 yr adj:
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3.97%
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EW BUSINESS
LOANS have become more difficult in today's economic environment.
For this reason, alternative funding for a new business loan is
important. |
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Financing new business loans through a bank a bank with an unsecured
loan is the traditional way to obtain money for a small business
startup. This article discusses using home equity. |
| Unsecured
loans that do not have collateral keep your home or property from
being at risk if you default on your loan, and are the most common
form of new business loan. But financing all of your startup money
through an unsecured loan may not be the best option. |
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If you
are a homeowner, the lowest interest most easily obtained loan
for your needs may be a home equity loan.
Home equity loans are simpler than small business loans and
they can be used to finance a portion of your business loan
needs at a lower interest while the rest of the loan is covered
by a typical unsecured loan.
By using a combination of an unsecured
new business loan with a home equity loan you can get a portion
of your loan at a lower interest rate. If you have enough equity
in your home, you can safely take out a small home equity loan
while putting your home at very little risk.
A home equity line
of credit is another equity lending option that can be used
to help you with your new small business. These loans are similar
to home equity loans except the money approved for your loan
can be borrowed as needed, paid back, and borrowed again and
again without much additional paper work. These loans are a
great way to accomplish what is commonly called a small business
administration loan.
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Common Questions: |
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1 Why
would home equity help my business? |
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- Many new business loans
end in default simply because a company does not have
enough cash to meet their monthly obligations. Most small
businesses are not profitable for their first couple years
of operation and require quick cash on a monthly basis.
A home equity line of credit can be an effective way of
meeting these cash needs.
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2 What
is a small business administration loan? |
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- A small business administration
loan is a loan taken out to cover operating expenses so
that a business can remain in operation while it has revenues
sitting in accounts receivable or otherwise tied up. A
home equity loan might be an option for covering these
cash needs in the short run at a low rate of interest.
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3 How
big are home equity loans? |
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- Generally, home equity loans,
whether used for the purpose of a new business loan or
not are as large as the equity you have in your home.
For instance, if your home loan is for $100,000 and your
mortgage balance is $80,0000, you should be able to borrow
as much as the difference, $20,000.
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Ask
a lender |
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