What Are Certificates of Deposit and How Do They Work?

Certificates of Deposit (CD) are monetary instruments that function like a savings account. Interest is paid on the initial investment at a rate dependent on the length of time the CD is held. One decides on the length of time when the CD is purchased. Common CD lengths range from as short as six months up to ten years or longer. CD interest rates also vary over time and change weekly. Purchasers must do research and compare rates to find the best CD.

CDs are sold via banks and some other financial institutions. What the institutions do with the money is up to them and most generally invest it in stocks or bonds or use it in the form of loans. A portion of their profit is returned to the purchaser in the form of interest and the rest the bank keeps as their profit. CDs are very safe investments making them a good way to balance an investment portfolio.

Occasionally, to attract many investors, banks will offer a higher interest rate on shorter term bonds when they are in need of a quick infusion of capital. Purchasing these CDs offers not only the advantage of higher interest payments, but the ability to quickly reinvest your capital in other opportunities. Investors should always be on the alert for such deals.

When the CD reaches maturity, meaning that you can redeem it for the full interest amount, you have two options. You can either cash the CDs or do what’s called a roll over and reinvest the CD for an additional period of time. Upon maturity, the CD will automatically roll over if you do not cash it. When you do a roll over, you can select a new length of time if you choose. Depending on the CD, roll overs will also allow you to defer any tax payments. This is especially beneficial to people nearing retirement age.

CDs are also a very good form of collateral. Banks and other lending facilities will gladly accept a CD as a form of collateral on a personal loan. In rough economic times, when loans are hard to acquire, this may be a perfect answer to your financial needs. Your Certificate of deposit will continue to collect interest while being held as a form of collateral. Most banks will offer very low interest rates on personal loans when a CD is used this way. Private lenders will also accept this type of collateral on a personal loan, but may not give as low of interest rates on the loan as the original bank that issued the CD.

CDs can also be used as a form of collateral against a loan just like a car or a house. This is an excellent way to secure a loan as the CD will continue to accrue interest as you pay off the loan. Interest rates on loans secured with CDs are generally very low since there is little risk involved.

In summary, CDs are a low risk, useful way to save and invest money. They offer diversity to any investment portfolio and can be used to secure loans while they are still earning you interest. Do the research, find the best rate, and purchase some CDs soon.

Hard Money Lender Real Estate – Financing Options For Investors and Borrowers With Bad Credit

Hard money lender real estate loans provide borrowers with poor credit the chance to purchase a home. These types of loans are considerably more expensive than traditional home loans financed through mortgage lenders. This type of financing is intended for interim use while borrowers rebuild or establish a credit history.

Hard money lender real estate financing is also used by investors to purchase commercial properties or realty intended for house flipping. Investors sometimes use this type of financing to buy properties that are not in marketable condition because this type of realty does not qualify for conventional financing through banks.

Hard money loans are referred to as ‘bridge financing’ because they bridge the gap for individuals who do not qualify for funding through a mortgage lender. Bridge loans can be used in addition to conventional loans and are often used with seller carry back financing.

Seller carry back is a lending option that helps individuals buy real estate by combining bridge loans with conventional mortgage loans. The property owner provides a portion of financing for one to two years and the balance is financed through a bank, credit union or mortgage lender.

For example, the Seller lists his property at $250,000 and offers to carry back 40-percent financing, or $100,000. The buyer obtains a conventional home mortgage loan for $150,000. The buyer has two mortgages against the property. The bank carries the first mortgage and the seller carries the second mortgage. Carry back financing is generally limited to 70-percent maximum of the property’s current market value.

Interest rates applied to bridge loans are substantially higher than interest applied to conventional home loans. Private financing interest rates are regulated by state usury laws. On average, bridge loans are charged an interest rate of 11- to 21-percent. At present, Florida has the highest usury rate which is capped at 25-percent.

Seller carry back real estate contracts often include default clauses which allow sellers to increase interest rates if borrowers become delinquent with loan payments or default on the loan and enter into foreclosure. Default interest rates can soar as high as 29-percent. Buyers can determine maximum hard money loan interest rates at UsuryLaw.com.

The amount of interest charged with bridge loans can vary depending on the amount of borrowed funds, as well as the funding source. Private real estate investors generally charge a lower interest rate than investment groups. Hard money loans for residential property typically carry a higher rate of interest than commercial property loans.

Bridge loans sometimes include a prepayment clause, penalizing borrowers who pay loans off early. One primary goal is to refinance hard money loans through a conventional mortgage lender as quickly as possible. A six-month prepayment clause is tolerable, while a two year penalty clause is unacceptable. It is highly recommended to consult with a real estate lawyer before entering into hard money borrowing.

Overall, hard money lender real estate loans are not the preferred method for financing. However, bridge loans allow borrowers with less than perfect credit the opportunity to buy a home and provide funds to investors for residential and commercial investment properties.

Home Based Business Tips – Dealing With the I Don’t Want to Blues

I woke up this morning and did not want to get out of bed. My mind kept telling me that I was better off getting some rest. If I slept a little while longer, I would do much better work. I earned the time off because I had a tough week. I face my mind every single day, as I am sure that so many of you do as well. In the past, my mind won and I wound up procrastinating and not doing the work that would ensure that I achieve my most important goals. However, that only cost me frustration and did not allow me to achieve my goals in my Home Based Business.

Now, I have implemented the following tips to make sure I get done what I need to get done every day to achieve my goals.

Below are some Home Based Business tips that you can implement to make sure that your mind does not take you out of the game in the beginning -

1. Get up the same time every day – This lets your mind know that you are serious and your success is non-negotiable. You should even get up the same time on weekends and days off. Even if you get up and go back to bed after working for an hour or so, you will be better off.

2. Do Something Physical first thing in the morning – If you do something physical, your mind immediately knows that you are serious and are not going to be stopped.

3. Do the Hardest Thing for the Day First – Whenever I do not take on my hardest task in my Home Based Business first thing in the morning, I wind up worrying about it. If I attack the hardest task first thing, then I accomplish a few things. My first task is complete and I don’t have to worry about it. The benefits are great.

If you are stuck with the “I Don’t Want To” Blues in your business, these tips should help you be more successful going forward. Go out there and conquer your mind.