Several Ways You Can Make a 2nd Income
In today’s rough economy with so much unemployment and even greater unreported underemployment, many people are looking for ways to supplement their earnings with a 2nd income. Getting a 2nd income does not always mean having a 2nd job and there are several alternatives that are available for the short and long terms.
The key to securing a 2nd income is to figure out first what it is that you really want to do, stay focused, be persistent and do not give up. First thing you need to do is find out what it is you truly want to do and that means finding out what it is that you are good at. If you like cooking and have a talent for whipping up great tasting food, for example, you could always find a job at a local restaurant or fast food chain.
You can be even more creative and make food items at home and sell them to friends and neighbors or at swap meets, flea markets, or your local farmer’s market. I recently went to a Farmer’s Market at a beach town near my home and there were numerous vendors there doing brisk business selling home-made ethnic food items. People love different types of food and will spend money (usually small amounts) to get a variety of them, especially at swap meets, flea markets and other outdoor festivals.
If you like to play music, you may want to consider getting into an established cover band or starting your own group. Some musicians make a great 2nd income playing steady “gigs” (shows) at local bars and restaurants. If it is just you and your guitar, you could play at swap meets, flea markets or your local Farmers Market. I know a few street musicians that make upwards of $30 per hour just doing what they love to do on busy street corners and having a great time.
What if your passion is writing, not music? There are many online blog sites that will pay you to provide them with a steady flow of content. You can also get writing jobs by checking out your local newspaper classified ads or Craigslist. Craigslist is a good source for many types of temporary jobs. Many ad agencies also hire freelance copywriters.
If you are really desperate for that 2nd income, you can always get domestic jobs such as babysitting, nanny work, dog walking, or even elderly care. Once again, Craigslist is a good and valuable free resource to find these types of assignments. They are usually not long lasting jobs, but the money you make can come in handy in a pinch.
A lot of people I know are moonlighting for 2nd incomes and that means taking on a 2nd part-time job, usually in the evenings or on weekends. If you decide to go this route, just make sure it is something that you truly want to do, otherwise you could get tired of it real quick. It is very tiring also and you don’t want to jeopardize your main employment.
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Things You Need to Know about a 2nd Mortgage
When people think of a 2nd mortgage they usually think of a Home Equity Line of Credit (HELOC), but there are many types of 2nd mortgage products that are offered by lenders.
When purchasing a home, borrowers with good credit, steady, long-term employment and provable income can usually qualify for a first mortgage such as a 30 year fixed rate mortgage loan from a reputable bank or lender. Most lenders, however, will not lend more than 80% of the purchase price and unless the borrower has sufficient funds for a down payment, this can cause a problem and eventually not allow the borrower to purchase the home or property they desire.
Banks and lending institutions offer fixed rate 2nd mortgage products to borrowers with excellent credit ratings to help them to bridge the gap between first mortgage amount and the purchase price. This is sometimes referred to as “gap” lending. Most banks, however, do not allow the total loan-to-value ration (LTV) to be more than 90% or 95%, which means that the borrower will have to come up with at least 5% to 10% of their own money to complete the transaction.
This is usually known as the down payment. Banks are extremely tight at the present moment with money lending and regulations are strictly enforced. Lending institutions are requiring borrowers to prove the source of their down payment money and they usually require “seasoning” which means that the money has to have been sitting in the borrower’s account for a certain number of months, sometimes up to a year or more, depending on the lender.
Many times when the bank does not wish to give the borrower a 2nd mortgage, a motivated seller will provide his own 2nd mortgage. This is known in the industry as a “seller carry-back” and is a 2nd mortgage loan that the seller makes directly to the borrower. The seller will register a legal lien based on the signed 2nd mortgage documents and the borrower will make monthly payments directly to the seller. If the borrower defaults on their payments, the seller will have certain legal rights to foreclose, just like a lending institution of bank.
The most common type of 2nd mortgage is, of course, the Home Equity Line of Credit. This HELOC product is offered by most banks and is usually offered to homeowners with excellent credit histories and sufficient equity in their properties. LTV ratios are usually low, less than 70% allowed, but rates can be very attractive. Most of these 2nd mortgage HELOCS are for 10 year terms, with interest only payments and a balloon payment due at the end of the 10 years. Borrowers make payments only on the portion of the HELOC actually used. In the past banks would provide HELOC customers with a checkbook, but these days it is usually a debit card. Homeowners can then use this money to make repairs, remodel, or pay off credit cards.
The preceding has been a summary of available 2nd mortgage products. Please check with your bank or lending institution for more options.
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