If you are planning to build your own home, the entire process can be extremely overwhelming. There are very few projects you or anyone else can take on that are more stressful and more prone to problems. One of the most dizzying aspects of building your own home is having a grasp on all of the legal agreements and contracts that you will need to enter into to get the job done. One contract that you will need to have a working knowledge of is a construction loan agreement. Let’s take a look at what a construction loan agreement is and why having one is so important.
To put it simply, a construction loan agreement is made to any individual, business or group who needs to raise funds for a major building project. It could be something as simple as a single family home or something as complex as a shopping mall. The agreement itself is fairly simple in terms of how complex it is. Every day, there are tens of thousands of these agreements signed in the United States by families looking to build their first home and by businesses looking for that next great investment.
The construction loan agreement is a short term loan agreement. These types of loans are never made for permanent financing of a project, but simply to help progress construction along or to help finance the initial groundbreaking. They are often repaid quickly with funds from the permanent financing option within only a few months.
While it is possible to get a construction loan agreement without permanent financing, almost all individuals and businesses get loans like these after permanent financing has been approved. Unlike many other types of loans, the entire loan amount is seldom released all at once; instead, the necessary funds in the loan are divvied out when needed to help keep construction progressing forward. This helps individuals from squandering much of the loan or spending more of it then they need to. If a business is seeking a construction loan agreement, most banks require personal guarantees for the loan to move forward.
The maximum term on a construction loan agreement is only 12 months, which puts pressure on the borrower to repay the loan as quickly as possible. The interest rate for these types of loans is plus 1 percent of prime and is adjusted monthly. For these types of loans, borrowers are completely responsible for all third party costs and points can be bought with these types of loans to keep long term costs down.
When it comes to drawing up a comprehensive and reliable construction loan agreement, clarity is the main goal of every good document. The biggest challenge you’ll face is defining the terms and conditions so that both the borrower and the lender agree upon the final set of terms. While a general construction loan agreement template can sometimes be used, each individual loan is often utterly unique and a completely original agreement is often needed.
Dig into the subject a little and you’ll find many cases of disputes due to either small writing that you overlooked or a misunderstanding at the time of signing for the loan. Loans are good business, for both you and the lender, provided you take it seriously and check out everything thoroughly.
The Small Writing
Have you ever wondered why “small writing” is small? Some may argue that it doesn’t affect the essence of the contract. Others may “accuse” the lending party of making it smaller so that YOU give it less importance and won’t care to read it. Whatever the reason, small writing is WRITING, and writing was made to be READ. So get your glasses on and read it.
Never Heard Of
I have never heard of loan agents actually asking the borrower to read the small writing… Honestly, I wouldn’t venture a reason. However, the fine tuning of the loan or contract is in the small writing. So read it thoroughly and decide whether you accept those conditions or not.
Most small writing clauses are all the same, obtained from a template provided by the organisation that regulates the trade, so it can’t be taken as a direct intention of the lenders to fool you. They’re mostly protecting their business, since there are more laws that protect customers than there are to protect the lenders from “wise loan takers”.
The Real Essence
The real essence of the operation is business. If you’re simply buying a car for pleasure, you are making business. Any transaction is business. The profit of buying a car is the satisfaction you get from using it.
The Other Way Around
Remember the saying about considering the glass half empty or half full? Well, it’s the same case here. You need their cash, it’s true… but they need the interest you pay, otherwise the will be out of business in no time. Lost of investors and lending agencies have tons of cash, but either it’s not theirs, or they HAVE to put it to work, or they’ll end up consuming it and eventually go broke.
Read everything and decide upon it. Don’t let anybody hurry you. Find out the little things you can use to negotiate a better deal. Remember that a well-used loan can mean much more to you than it does to any lender. The lump sum you get can leverage big business. Even if it is a small loan, the proportional business it can give you is big, compared to your present condition.
When cataloguing lenders, rather than considering them good or bad ones, there are just “convenient” or “not convenient” ones for your situation. Stop thinking that they are trying to fool you. It puts you in a defensive situation and makes you feel weak. You are the customer and the lenders, dealers, brokers or whatever you wish to call them, need YOU.
Everything you do these days requires a lot of legality, thus the paperwork. It is often debated why there is a need for documents. For one, it will serve as proof that the transaction indeed took place, and in the case of business contracts, it will also serve as a referral when disputes or conflicts arises.
Loan Agreement- Its Purpose
Every agreement has a purpose why it was drawn up in the first place. For a loan agreement, it is to plainly define the terms that both parties involved are conforming to. It also includes the responsibilities of each of the parties regarding the loan.
Loan agreements are drawn up for the following use:
- Loan agreements are used by individuals or an organization to borrow or lend money.
- In corporate aspects, shareholders can make use of the agreement to borrow funds from the business.
As the name implies, a loan agreement is a legal document containing the details and agreement of two parties regarding a loan. Agreed terms and conditions are included in the details. If you are on the verge of drawing up a contract, it is advised that you consider a loan agreement template. There are a few ways to do this:
• Providing a loan means you have to record every detail of the transaction. Make a note in your template about the amount of the loan, date given, as well as the location of the transaction.
• Make sure to include the full and complete name of the parties involved in the transaction. Include current addresses especially residential ones.
• Payment terms should be included in the agreement- mode of payment and date of payment(s).
• If there is an interest on top of the amount to be paid, this should be plainly stated in the agreement.
• If there is collateral used to obtain the loan, this should also be noted in the agreement.
• Only when the agreement is signed by both parties should the amount to be loan be turned over to the debtor.
Since everything we need nowadays is easily accessed through the internet, you can choose to search online and get information where you can obtain a downloadable loan agreement template. It is best to obtain one so you can cross reference if such document includes what is listed above.
If you are the lender, you have to be certain that you and the borrower are clear with the terms and agreement of the loan before you proceed to draw up a loan agreement. This will ensure that disputes will be prevented and if not, it can be dealt with accordingly because you have a written contract to refer to.
If you think that loan agreement templates are only useful for businesses or big corporate houses, think again. You can use such document when you are lending out money from your friends or even family. This way, you can avoid conflicts when it comes to payment since a lot of issues arise in this area when it comes to a loan.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.