How to Choose between Different Types of Mortgages

With so many different types of mortgage available, it’s difficult to determine the right one for you. Before you start looking at available mortgages, however, it’s important to first evaluate your finances, as your financial situation is an important factor that will dictate the type of loan you need, and how much you can afford to borrow.

Step One: Evaluating Your Finances

Before you even think about the type of mortgage you should obtain, it’s important to evaluate your financial situation. Check your credit rating and FICO score, evaluate your income and debt level, figure out the size of the down payment you can afford, and determine how much mortgage you can afford and what your credit rating will allow you access to.

When it comes to your credit rating, know that between 620 and 699, you’ll probably pay a higher interest rate than if your credit rating is over 700, due to a slightly higher perceived risk on the part of lenders. If your credit rating is below 620, you may find it’s better to wait and improve your credit rating rather than be forced into a sub-prime mortgage with a high interest rate.

Step Two: Choosing the Best Mortgage

Once you have completed an evaluation of your financial situation, you’re ready to start thinking about the kind of mortgage you want. The mortgage that best suits you will depend on a long list of factors, not all of which are related to the amount of money you have for a mortgage. Think not only about how much mortgage you can afford, but also your credit rating, how long you plan to stay in the home, and whether you think your plans or financial situation might change in the future.

So what are your main mortgage options?

Fixed rate mortgage

 

Normally a 10, 15, or 30-year mortgage, you pay the same interest rate over the life of the loan.

Good for: If you like the security of paying the same amount every month and you’re planning on owning the home long-term, this is definitely the best option. There are some variations on this theme, including jumbo mortgages, which are larger-than-standard loans with a slightly higher interest rate.

Adjustable rate mortgage

 

These are mortgages with adjustable interest rates, which come in several different varieties. When you first get an adjustable rate mortgage the interest rate is lower than that you’d get with a fixed rate mortgage. However, at intervals, the interest rate can increase or decrease according to current market rates. This means your monthly repayments aren’t fixed, so these types of mortgages are more risky in comparison to fixed rate mortgages.

Good for: If you want a mortgage with an initial low rate and you’re prepared to take a risk on later rates (or you only plan to own the home for a few years), this may be a good prospect.

Interest-only mortgage

 

The standard type of mortgage is amortized, meaning your monthly repayments include both principal and interest. An interest-only mortgage is just what its name suggests – your monthly repayments don’t have to include principal (but you can pay off principal amounts at any time). This means you are not building up equity in your home while you’re only paying interest, but there are no pre-payment penalties.

Good for: This type of loan can work well if your income is at a consistent level overall but is subject to highs and lows, since you can pay off extra principal when you can afford to do so, and pay interest only when your income is at a lower level.

Balloon mortgage

 

This type of mortgage has a fixed interest rate and stable repayments over the life of the loan, with lower repayments in comparison to a fixed rate mortgage. However, the terms of the loan are generally short, with three, five, and seven years being the most common options. At the end of this time period, the entire balance of the loan is due. The final payment is typically very large, so a balloon mortgage is one which shouldn’t be taken lightly.

Good for: This type of mortgage can be a good option if you plan to stay in the home long term, want to get your mortgage paid off quickly, or if know you can afford the balloon payment. Alternatively, a balloon mortgage can be useful if you know you’ll be moving or refinancing before the balloon payment is due.

30-due-in-7

 

For the first seven years of the mortgage you have a fixed interest rate which is generally lower than that of a standard fixed rate mortgage. In the eighth year of the mortgage, the interest rate changes to be in line with whatever the current rate is at that time. For the remaining 22 years of the mortgage, the interest rate stays fixed at that rate. Another option is a 30-due-in-5 mortgage, where the interest rate changes in the sixth year.

Good for: These mortgages can be a good option if you’re planning to stay in the house for more than five or ten years and you are willing to risk the possibility that your monthly payments may change substantially when the second interest rate is due.

About the Author

Rachel Jackson is a freelance writer who writes about topics and pertaining to the mortgage industry such as refinancing home mortgage.

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Advantages of Renting a Trade Show Display

As many businesses know, trade shows are a great way to gain exposure and enhance the image of your company.In addition, attending trade shows lets you learn about new industry developments, make important connections, and increase sales.But deciding on a trade show display isn't always easy.For some companies, buying a trade show display just isn't the right choice.

Renting, rather than purchasing, a trade show display can help you get the best return for you marketing investment.Trade show displays can increase interest in your business, and there are many reasons renting a trade show display is a smart move.

Renting Provides Flexibility
When you own a trade show display, you don't have the option to customize it for each event.
There isn't a lot of flexibility involved in owning your trade show display, and flexibility is extremely important when it comes to trade shows.You need to be able to take the feedback you receive and apply it to creating a better display for the next event.

Renting a trade show display lets you customize the display for your needs at each event.Perhaps the first display you chose was not the ideal one for your situation.If you rent your display, you can simply modify it to fit your needs.One booth may work perfectly in some situations, but at other events, it could be all wrong.This isn't something to worry about if you are renting your display.

Making Your Display More Cost-Effective
Especially when it comes to start-ups or small business, the financial outlay required to buy a trade show display can be crippling.
Renting a trade show display gives your business a chance to fully prove itself without investing a large chunk of revenue in purchasing a display.

Also, some companies do not attend very many trade shows each year.Owning a display is a waste of money if you are only going to use it a few times throughout the year.You would be better off putting this money into other areas of your company and instead renting a trade show display.

No Commitment
Renting a trade show display is especially practical for new businesses that are just beginning to attend trade shows.
Rental offers the convenience of not have to commit to purchasing a display.

Sometimes, a business will think that attending trade shows is a great idea, go right out and purchase a display, and then find that trade shows are not the best way to promote their products.You can avoid this problem by renting a display instead.

Deciding Whether to Rent
Before deciding if you should rent or buy a trade show display, think about some of these considerations:

- How does your trade show exhibit fit in with your overall marketing needs as a company?



- How many trade shows does your company plan to attend each year?
- Can you afford the high initial investment of purchasing a trade show display?
- What sort of message do you hope your trade show display will deliver to potential customers?
- How many of your employees will be attending the trade shows?
- Will your needs be changing in the future or do you feel confident that you can predict your display needs?

These questions can help you sort out what you want to accomplish with your trade show presence.Knowing what you hope to attain from a trade show helps you decide whether trade show display rental is right for you.
About the Author

Our trade show display company offers trade show display rentals, display booth rentals, pop up display rentals and rentals for table top displays for all your trade show products needs.

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The One-Page Business Plan for Your Bookkeeping Service

Sometimes the thought of sitting down to draft a business plan sends me running for the hills, even though I preach the importance of planning to all of my clients Small business advice: Without planning, your bookkeeping business goes nowhere fast. When you fail to plan, you plan to fail.

What I have come to learn as a business coach is that business plans dont have to be long to be good. In fact, a single page can contain all the essential elements you need to show where youre taking your bookkeeping business and how youre going to get there. The most important reason to have a business plan is to clarify your thinking about where you are taking your business. When its in writing, others will know and understand your vision and your plan.

Here are a few characteristics of an effective one-page business plan for your bookkeeping business:

- Simplicity. A one-page plan takes a complex subject and makes it simple.
- Focus. It focuses on whats important. There is no room for fluff or filler.
- Versatility. It is a communication tool for employees, prospective employees, partners, shareholders, investors and bankers.
- Consistency. It sends the same message to every person who receives it, unlike a verbal presentation, which may change every time you speak.
- Flexibility. It is easy to change and update.

The Five Elements of the One-Page Business Plan:

1. The Vision Statement - What are you building

This is the place where you describe your vision - your way. Most business coaches will tell you that vision statements should be expansive and idealistic. They should stimulate thinking and communicate passion, while painting a detailed picture of the bookkeeping business you want. The key to capturing your vision is to refrain from restricting the flow of thoughts.

2. The Mission Statement - Why does this business exist

The mission statement describes the purpose for which your product, service or business exists. Great mission statements are short and memorable. They communicate in just a few words the companys focus and what is being provided to customers. They answer the question, "Why will customers buy this product or service" The mission statement should also reflect the owners passion and commitment. When the business satisfies an owners passion for creativity, independence or the need to serve, there is substance and staying power in the mission.

3. The Objectives - What results will you measure

Objectives clarify what you are trying to accomplish in specific, measurable goals. Some of the best small business advice that I can give you is this: for an objective to be effective, it needs to be a well-defined target with quantifiable, measurable elements. There are many types of objectives, and your plan should include a variety of them. For many businesses the two most important categories will be the financial and marketing objectives. It is important, however, to tailor your objectives to cover the full scope of your bookkeeping business, focusing on the goals that are most critical to your success.

4. The Strategies - How will you grow your business

Strategies set the direction, philosophy, values, and methodology for building and managing your company. Strategies also establish guidelines for evaluating important business decisions. In most industries there are four to six core strategies that successful businesses follow. These core strategies are easy to understand, remain relatively constant over time, are used by market leaders and result in profitable growth. Here are two examples of a core strategy: "Price isnt everything," and "Attract the very best employees and give them a stake in the business." What are your strategies

5. The Plans - What is the work to be done

Plans are the specific actions the business must implement to achieve the objectives. Plan or action items should contribute to the growth of your bookkeeping business. Each plan or action item is, in effect, a project. Plans should be action-oriented, list specific tasks and have definitive deadlines or due dates.

Once your plan is in writing, it is now time to put that same plan into action. Putting the plan into action is the most important step because the actions deliver the results you wanted when you started this process. For most entrepreneurs, this is easy - you are already action-oriented Here is some business advice, as well as a few suggestions, to help you put and keep your bookkeeping business plan in action:

- Keep the plan with you.
- Use it as a decision-making tool.
- Update it with new thoughts.
- Share it with people you trust and whose opinions you value.
- Measure your progress at least quarterly.
- Prepare a budget to match the plan.


About the Author

Linda Hunt and Laurie ONeil are the co-founders of The Bookkeepers Referral
Network Inc., the place where business meets great bookkeepers. To get your
copy of The 9 Disastrous Mistakes Most Freelance Bookkeepers Make in
Business and How You Can Avoid Them visit http://www.bkpr-network.com

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