Bridge loans: Everything you need to know

In case you are moving to a new home in the near future and need some extra cash on hand to help you out in transition, Bride Loans can help you out. Bridge Loans, as the name suggests, are there to ‘bridge’ the short-term financing needs of the individual between buying and selling their home at the same time.

The mechanism behind a Bridge Loan

There are two different ways a Bridge Loan is packaged. So, before you take advantage of the bridging loan calculator here, first, you need to understand these two types of packages.

  • Holding two loans: This package is relatively straightforward. The lender would allow you to loan the balance between the current loan balance and 80 percent of the new home’s value. This is a second mortgage you take on your house, where these funds are applied as the down payment of your new home. The first mortgage is naturally kept intact until the deal for the sale of your home is complete. Simply put, you are holding two loans at the same time.
  • Combining both mortgages into one: Another way that lenders package this deal is by simply combing both of your mortgages into one. In this scheme, you would be allowed to take out a loan (up to 80 percent of your current home’s existing value), pay off the first mortgage, and then use the second toward the down payment for the new home.

As one can quickly gather from both of these packages is that Bridge Loan is simply there for one to purchase a new home while they are in the process of selling their existing home. For folks entertaining more than one offer for their current home, this loan can be exceptionally beneficial as they can take their time and get the best deal for them.

How can one get a Bridge Loan to buy a new house?

That is the point of getting a Bridge Loan, isn’t it? To be able to close the deal on your new property while you are still in the process of selling your existing one. Getting a Bridge Loan is quite easy. Often the lender would look at your existing property value, Debt-to-income ratio, credit score, household incomes, and other standards metrics to help determine whether you are a default risk or not. In case you have been good with the mortgage with your current home, your application would be fast-tracked for speedy approval. It is as simple as that.

How much can one borrow as a Bridge Loan?

The amount one can borrow as a bridge depends on the lender in question. Different lenders use different metrics for calculating and determining the upper ceiling for one when it comes to borrowing under Bridge Loan. But typically, the upper ceiling is set at the 80 percent value. Yes, there are lenders that might go up to 85 percent, but in rare cases. You would find 80 percent to be the standard benchmark on the market.

Pros and Cons of Bridge Loan

Pros

  • A hugely beneficial loan for folks that do not want to lose a deal just because the sale of their current house has not yet been finalized
  • Beneficial in the seller market as it takes away any kind of final contingencies from the offer. It naturally is desirable to the seller as they can be sure of the clearance of the deal without any hiccups.
  • One can avoid any kind of private mortgage insurance by using the Bridge Loan amount as the down payment.
  • Fast approval for this type of loan

Cons

  • A higher rate of interest than the other loans on the market
  • A short loan period: most Bridge Loans are offered from 6 months to 1 year, resulting in higher monthly payments
  • The borrower has to pay two mortgage fees
  • While Bridge Loans are quite easy to get, one might face some challenges if they do not have healthy financials to back them up.
  • In the end, the borrower is paying more out of pocket due to the added interests and other charges.

So, yes, while Bridge Loans can be hugely beneficial, there are some cons that one needs to be aware of as well.

 

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What are demand and supply? A simple explanation for business owners

shoppers hoarding toilet paper

As a business owner, you need to understand the basic concepts of demand and supply.

These principles dictate how much of a product or service is available and how much people are willing to pay for it.

In this post, we will provide a basic explanation of what demand and supply are, and how they interact to create equilibrium in the market.

What are supply and demand?

Supply and demand are one of the most basic concepts in economics. It’s the theory that drives how businesses price their products and services.

In short, supply is how much of a product or service is available, while demand is how much of a product or service people want. When these two things meet, a market is formed and prices are determined.

If there’s high demand and low supply, the price will be high. If there’s low demand and high supply, the price will be low. It’s as simple as that!

How do demand and supply affect businesses?
a pharmacy with sold out rapid antigen test kits sign

Image Credits: asia.nikkei.com

If there is more demand for a product than there is available supply, the price of the product will go up. Businesses will then be able to sell the product at a higher price, making more profit.

However, if there is more supply for a product than there is demand, the price of the product will go down. Businesses will then need to lower the price of the product to sell it, making less profit.

Tips for using demand and supply to your advantage

Now that you understand the basics of demand and supply, here are a few tips for how to use them to your advantage:

  • Take advantage of market changes. If there’s a sudden change in the market (perhaps due to a natural disaster), adjust your prices and supplies to meet the new demand.
  • Pay attention to seasonal changes. When demand is high but the supply is low (for example, during the holiday season), increase your prices to take advantage of the increased demand.
  • Keep track of your competitor’s prices. If they’re reducing their prices, it’s likely because they’re experiencing a surplus of supply; conversely, if they’re raising their prices, it’s because they’re experiencing a shortage of supply. Use this information to adjust your prices accordingly.

By using these tips, you can ensure that your business is always making the most of demand and supply!

In summary, demand is how much of a product or service is desired by consumers. Supply is how much of a product or service is available to meet that demand. When there is equilibrium between the two, prices stay stable and businesses can operate successfully. However, when demand goes up and supply can’t keep up, prices for the product or service go up as well. On the other hand, if there is more supply than people want, prices go down. Business owners need to be aware of these things so they can adjust their prices and profit strategies accordingly.

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Why engaging in a price war is a bad idea

price war

You may be tempted to engage in a price war when you’re starting your business. You may feel like you need to do everything you can to undercut your competition.

But here’s why you should not engage in a price war: It’s bad for your business, it’s bad for your customers, and it’s bad for the economy.

Keep reading to learn more.

What is a price war?

In the business world, a price war is a situation where businesses engage in a race to the bottom to offer the lowest prices. There are several reasons why you should stay away from price wars when running your business.

First, engaging in a price war can quickly lead to losses for all involved. Second, it can be difficult to win a price war, as your competitors may be willing to offer even lower prices than you are. Finally, by engaging in a price war, you may sabotage your brand and lose customers who are unwilling to shop at a business when prices are back to “normal”.

Can you win a price war?
lingerie sale

Image Credits: unsplash.com

It’s no secret that price wars can be brutal. Not only do they have the potential to drain your resources and profits, but they can also lead to customer attrition and decreased brand loyalty. So, the question is, can you win a price war?

In theory, yes, it is possible to win a price war. But in reality, it’s very rare for a business to come out on top. This is because most companies engage in price wars irrationally, without any clear plan or strategy. As a result, they end up slashing prices to unsustainable levels, which only serves to erode their capital and hurt their brand.

So before you decide to engage in a price war, ask yourself this: Is it worth it? Some entrepreneurs might be hesitant to engage in a price war, thinking that it’s not a wise decision. After all, who wants to spend time and resources fighting a battle that they’re not confident in winning?

What are some alternatives to a price war?

There are a few alternatives to engaging in a price war when running a business. You could try to differentiate your product from that of your competitors, focus on customer service, or invest in marketing and advertising to increase your brand awareness.

Another option is to slightly raise your prices. This can be a risky move, but it can also be successful if you can convince your customers that your products are worth the extra cost.

You could consider lowering your costs in other areas of your business, such as production or offering free shipping. This may be less desirable than the other options, but it can be an effective way to stay competitive without resorting to a price war.

What are the long-term negative effects of a price war?
a man stressed over declining profits

Image Credits: profitkoach.com.au

There are a few negative long-term effects of engaging in a price war. As briefly mentioned earlier, it can harm your brand. When you slash prices to compete with others, you’re essentially telling your customers that your products are of low quality or that you’re desperate. This can cause them to lose faith in your brand and switch to a competitor.

Second, price wars can be costly and detrimental to your business. You may start by slashing prices to stay competitive, but eventually, you will have to raise them again to make a profit. However, your competitors may not be willing to raise their prices back up, which could put you at a disadvantage. In the long run, a price war can be very flawed for your business and lead to its downfall.

When it comes to business, one thing is for sure: you have to be smart about the decisions you make. So, if you’re thinking about engaging in a price war, think again. Customers do place a lot of value on quality, and many of them are willing to spend more for a product that is smarter, quicker, tougher, more stylish, or environmentally friendly. You can also consider adding extras like freebies, free delivery, or complimentary gift-wrapping. Good customer service has a big impact on customers too. These alternative strategies can not only be more successful, but they are nearly always less expensive than participating in a pointless pricing war that could cause the collapse of your company.

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Optimize Manpower by Improving Your Organizational Learning & Development

Dave Ulrich once said: “The most important thing Human Resources can give an employer is a company that wins in the marketplace.” Learning and Development strategies can help with that!

Learning and Development is a systematic process used to enhance an employee’s skills, knowledge, and competency. This process can result in better performance in the workplace. Here are some of the terms that you need to be familiar with.

a. LEARNING: acquisition of knowledge, skills, and attitudes
b. DEVELOPMENT: deepening of knowledge in line with one’s goals
c. EDUCATION: formal manner of broadening one’s knowledge
d. TRAINING: teaching immediately applicable knowledge, skills, and attitudes for a specific position

4 PHASES OF LEARNING & DEVELOPMENT PROCESSES

These four phrases are according to the pedagogical analysis by van Gelder and colleagues (1970).

1. Training Needs Analysis
2. Specifying the Learning Objectives
3. Designing of Training Content and Method
4. Monitoring and Evaluation

PHASE 1

Analysis of the current situation and prior knowledge to identify training needs is the first step. You don’t want the employees to learn for the sake of learning! That is a waste of money and resources. Instead, you want them to acquire new knowledge, skills, and attitudes that are relevant for their future functions.

PHASE 2

Learning objectives serve as the starting point for the design of the training’s content and method. It will serve as your guide as you assess your training goals.

Start by identifying specific objectives. Then, outline the conditions required for efficient behavior. Lastly, set specific and measurable training goals.

PHASE 3

The third phase includes the identification of learning methods, teaching materials, and learning activities. It is often done by an external trainer or a training provider. Aside from these, techniques and settings are determined.

It is important to know that training can either be trainer-centered or trainee-centered. Trainer-centered methods include seminars, presentations, lectures, keynotes, and lessons. In contrast, trainee-centered methods are more interactive. This includes case studies, role-playing, self-directed lessons, on-the-job training, simulation, games, and so on. Effective training includes a healthy a mix of methods.

PHASE 4

The last phase pertains to the evaluation of the learning objectives and learning effectiveness. A particularly useful model for evaluating learning effectiveness is Bloom’s taxonomy, which we will tap later.

BLOOM’S TAXONOMY

This model is used to evaluate learning effectiveness. It captures several levels of information processing. The assumption here is that to analyze information, an individual needs to be able to remember it, understand it, and apply it.

Image Credits: unsplash.com

Remember that an effective training should result to a change in behavior! It is important for supervisors and HR personnel to religiously evaluate not just the training execution, but also the employee’s performance. The profits and other pleasant effects on your business will follow.

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5 Tips for Keeping Ahead of the Competition in Today’s Job Market

a job interview session

Contrary to a common misconception, being a hard worker is often not enough to guarantee career success, especially if one is part of a job market as competitive as Singapore’s. While diligence and perseverance are undoubtedly essential, you probably know by now that they will only get you so far. You cannot merely toil day and night, hoping that your superior will notice and give you a promotion. If you want to advance your career and stay ahead of the competition, you can’t wait for good things to just happen. You need to take control and make things happen.

Perhaps you are wondering how you can be more proactive in climbing the career ladder and positioning yourself for success. If so, continue reading this short guide. Whether you are searching for your first job or are looking for ways to get ahead, the following tips can help you find your edge and become more valuable and marketable to current and prospective employers.

Keep Learning and Growing

If you want to remain competitive, you need to continue learning and improving—personally and professionally. You can’t afford to become complacent and relaxed even if you are currently doing well in your current position. Keep in mind that in a fast-paced business landscape, developing your skills and knowledge is a requirement to stay ahead and be ready for the challenges of the future.

As such, you may want to enrol in postgraduate programmes, take continuing education classes, or attend lectures that could help you learn deep skills related to your industry. You may also take advantage of various government initiatives that support lifelong learning and skills mastery.

For instance, you can take certificate courses in Singapore from an accredited institution to gain a fundamental understanding or to upgrade your skills in different emerging areas, including cybersecurity, data analytics, and digital media. You can also take advantage of the SkillsFuture Credit, which provides direct subsidies of SGD 500 to all Singaporeans over 24 years old to pay for a broad range of accredited skills-related courses.

Engage in Volunteer Work

You may not realize it, but doing charity work benefits you in many ways. Besides that feel-good emotion and having a sense of purpose, volunteering can help you get ahead professionally. For starters, you can learn transferable skills in your volunteer gigs that could make you more enticing to employers if you are looking for a job. If you are already working, volunteering can widen your experiences and teach new skills that can help you grow personally and beef up your professional credentials at the same time.

Aside from the valuable lessons, volunteer work allows you to network and expand your connections. You can meet and build meaningful relationships with people in various fields and industries. These relationships could furthermore open doors to rare opportunities that can help advance your career down the road. If you have yet to engage in such work before, you can check out the Singapore government’s one-stop volunteering platform online to find causes aligned with your interests.

Enhance Your Professional Presence

It is not enough that you are capable, highly skilled, and knowledgeable to succeed professionally. You also need to ensure that others know that you possess these remarkable qualities. If the people you interact with have a negative impression of you, it will be much harder for you to get ahead. After all, perception is powerful.

So, how do you boost your professional presence to make you stand out from the rest? Here are some pointers you may want to consider:

  • Make sure that your appearance and behaviour convey confidence, competence, and integrity.
  • Be mindful of your reactions and how they affect other people.
  • Hang out with respectable people.
  • Keep your social media interactions and online posts decent and professional.
  • Learn to listen and develop a positive communication style.

Join Industry-Related Professional Organisations

Joining professional organisations is another useful avenue to expand your network and meet industry experts that can serve as mentors or role models to keep fuelling your passion for success. Aside from building relevant connections, joining professional groups will give you access to exclusive events, courses, and online resources. All these initiatives can help you stay updated on new technologies and trends in your field. Moreover, professional organisations are also great venues to learn about lucrative career opportunities that you may not have known about otherwise.

Learn from Your Heroes and Competitors

If you want to be successful, study the stories of those who achieved great success. They could be the people you look up to or your competitors. Assess their actions, observe how they talk, and take note of their behaviour, beliefs, and principles. Then, identify crucial points you can emulate to boost your own career. Do this exercise with humility and an open mind. Don’t be afraid to admit that you don’t know everything. Remember that you can only grow if you accept your shortcomings and commit to improving them.

Staying relevant in today’s workforce requires hard work, but it is not the sole key to achieving this. As advised above, you need to carry out a range of strategies that will give you an edge and create opportunities for employers to notice your worth. So, resist the urge to sit on your laurels. Continue developing and making yourself better wherever you are in your career journey.

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