Debt, Credit Repair, Mortgage, Loans, and Credit Card Advice » Home Mortgages

How Credit Scores Affect Mortgage Applications

admin — Tue, 08 Jul 2008 07:23:22 +0000

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ‘secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.

Benefits of Secured Homeowner Loans

admin — Sun, 24 Feb 2008 03:24:00 +0000

All loans come under one of two umbrellas, and these umbrellas are secured or unsecured loans. A secured loan is secured against an asset, which is usually the home, and therefore is only available to homeowners. You will usually need to have some level of equity in your home to get a secured loan, although some lenders will offer finance to those with little or no equity. In order to calculate your equity levels you simply deduct the amount of any outstanding mortgage or other secured loans from the market value of your home, and the remaining balance is your equity.

Secured loans offer a number of valuable benefits to borrowers, making them an effective and affordable borrowing solution to fund a wide range of purposes. One of the main benefits of a these loans is that you can enjoy a low rate loan to fund purposes including debt consolidation, home improvements, purchasing a car, paying for a holiday, funding a wedding, and more. Even those with bad credit can often get one if they are homeowners even if they have faced difficulties getting an unsecured loan because of their credit.

There are a number of other benefits offered by secured loans. For example, you can enjoy greater borrowing power with a secured loan compared to an unsecured loan, although the exact amount that you can borrow will usually depend on the level of equity in your home. You will also be able to enjoy longer repayment periods than you would get with an unsecured loan, which means that you can spread your loan over a longer period, and therefore cut back on the amount that you have to repay each month.

They are an effective and affordable way to borrow money if you are a homeowner, but you need to remember that the terms of borrowing can vary from one lender to another. It is therefore important that you compare different secured loans and look at areas such as the typical APR, the repayment period offered, any exclusions or restrictions, and any hidden fees. You should also make sure that you get at least several quotes before you make any commitment, as the cost of one can vary from one lender to another.

You should remember that whilst there are many benefits to taking out a homeowner loan there is a downside to consider as well. This type of loan is secured against your home, and therefore if you default on your repayments you could be putting your home at risk. Also, if you take out a secured loan for close to the limit of your equity levels and then house prices fall you could find yourself tied into negative equity.

As long as you bear the negatives as well as the positives of a secured loan in mind if you decide to take out this type of loan you should be able to enjoy affordable and convenient borrowing with this type of loan, making the most of the equity levels in your property.

2008 Bad Credit Mortgage Boom

admin — Thu, 21 Feb 2008 04:50:59 +0000

In the past years, the private sector has dramatically expanded its role in the mortgage bond market, which had previously been dominated by government-sponsored agencies. Especially subprime mortgages that became increasingly popular in recent years are considered higher-risk loans because they typically draw borrowers in with an initial low “teaser” interest rate, which can spike upward after the first few years.

Generally, subprime loans are mortgages given to borrowers with credit scores of 620 or below. Such low scores result from a history of paying debts late or not paying debts at all. Because subprime borrowers are seen as “higher risk,” their loans carry interest rates that are at least 2 percentage points higher than those offered to borrowers with better credit.

Unfortunately a lot of subprime mortgage loans are defaulting. Most subprime borrowers take out a loan to pay off creditors, but it may not be enough to solve their financial problems. Some loans were given to people who just couldn’t afford the payments – even before their rates increased – but weren’t savvy enough to turn them down. A big reason why is that, to avoid discrimination charges, lenders gutted their traditional lending standards in order to loan money to people with bad credit more common in some minority communities, so refusing to lend money to people with bad credit is alleged to have a racially “disparate impact”). The Community Reinvestment Act, which punishes banks that don’t make loans in high-risk areas, is also a key reason why (it was enacted and then made even more onerous by the very politicians who are now shrieking about the mortgage crisis they helped create).

Also subprime mortgages are boosting the housing sector, where predatory mortgage companies target consumers with bad credit ratings and low incomes. These consumers are often ineligible for the much lower prime market rates. The lenders prey upon the dream of homeownership among the working poor, offering to accept “high risk” borrowers. In turn, interest rates are inflated very high, so exorbitant that many borrowers cannot keep up with payments, penalties and other fine-print fees, particularly in the event of job loss, injury or illness in the family. A very high percentage of sub-prime mortgage agreements end in desperate refinancing attempts, foreclosures and personal bankruptcy filings.

What can be done to curb bad credit mortgage booms? In response to aggressive lending practices by mortgage lenders anti-predatory lending laws can be enacted that regulated the provision of high-risk mortgages. However, research shows that these laws have not been effective in limiting the growth of such mortgages. But on the other hand with lending standards now tightened, fewer borrowers will qualify for loans. That’s a double whammy for housing – more homes on the market and fewer buyers. For example, in markets where home prices might have fallen 3 percent because of the general housing downturn, the presence of a lot of subprime borrowers in trouble could magnify that to a 6 percent price drop.

Pay Off Your Mortgage

admin — Fri, 14 Dec 2007 22:11:51 +0000

There is an idea floating around out there in the ether. Some folks are actually talking about paying off their mortgages and getting out of debt for good. Poppycock! That’s madness. What is so great about financial freedom anyway?

Face it. Your mortgage, for which you probably broke traffic laws to get to the closing, has become a ball and chain. The dollar amount of your home loan may have actually increased over the years, while the appraisal value may have gone down. This begins to look rather hopeless after a while.

Now, there are some friends of mine who claim that they do NOT want to pay off their mortgage. They say they need the tax write off. I just can’t get my mind to go there. Saving a few bucks on taxes cannot compare to owning your home outright. You must eliminate your mortgage if you really want to build wealth, which begs the question…..how?

The typical comsumer has mortgaged the largest loan he could, right? Didn’t you sit down and figure out your budget with your lender? They have formulas for this kind of thing, and we all went for it. They were right. Your mortgage is probably just the right amount to guarantee that you can make your payments….almost comfortably. By the way, they also know that you will probably be refinancing in the next 5-7 years, and that you will, indeed, never get out from under the beast that is called ” closed-ended loan with front-loaded interest”. It is a killer, make no mistake.

You have GOT to do something about it. So how do you pay off a mortgage? Simple. Just add more money. If you pay down your principle balance, they charge you less interest. If you make just one additional payment per year, you will save 5-7 years of payments at the end of your mortgage. Great. Where am I going to get an extra $1199 this year? You could scrape up $100 per month couldn’t you? Sounds fun doesn’t it? Not.

Suppose you could use someone else’s money? Would that work? Yes, I think it would. In fact, if you could apply $5,000 to principle on your 30 year mortgage, just once, you would eliminate $28,000 in interest charges. Why, if you did that several times, you could pay off your mortgage in a fraction of the time! So, who is going to let you use their money, because most of us don’t have the extra 5 grand sitting around. Ah, but perhaps you do.

See the whole time you are slaving away and making your mortgage payments, you are building equity. Not much at first, but it is happening. You also may have some built in value in your home or elsewhere. This is the beginning of leverage.

The bank has available to you, a completely different kind of credit. It is called “open-ended” credit. It is nothing like your mortgage.

Your mortgage is closed-ended credit. Money only flows in one direction. The Bank’s. You have to make full payments, on time, and you can never ask for them back. The interest is extremely loaded onto the front of the loan, so that the bank gets paid their profit first, long before you actually make progress on your part of the loan. That is why banks have the biggest, nicest buildings in every town or city.

But open-ended credit, in the form of a Home Equity Line Of Credit (HELOC) or a Personal Line Of Credit (PLC) allows you to create real cash flow. Cash flows in and out, and every time it does, the balance in the account changes. The bank can only charge you interest on the actual daily balance. So get the picture here. If you were to borrow 20 dollars today, and pay it back tomorrow, you would only owe interest on 20 dollars for one day.

If you were to borrow, say $5,000, and make a payment to the principle on your mortgage today, and then deposit your $5,000 paycheck tomorrow, what would happen? Well, you would owe the interest on $5,000 for 1 day….about $1.75 – $2.00. But you cancelled $28,000 in interest charges on your 30 year mortgage! Whoa! Does this sound too good to be true? Yes and no.

The fact is, this is just math and money. Neither of them ever sleep. If you do the math right, this idea becomes fact. The problem is, it is a lot of math. You would constantly have to be monitoring your cash flow, expenses, fluctuations, and lifestyle. Life changes all of the time. You cannot just pull a dollar figure out of a hat, and go borrow some money from your HELOC. You could easily get yourself in an expensive financial hole. It would have to be a precise number, and that number would always be changing. Boy, if only there was computer software…….

Did I mention that there is computer software that can help you do this? Oh yeah. There are several companies out there that offer software of different kinds. Some companies are just banks who want to “help” you refinance, some offer a course on how these ideas work, others are legitimate software developers. Most of them charge $3500, so make sure you pick the right one. The big names in the business are: United First Financial, Sydney Financial Group, CMG, Free and Clear, and McCory. More are popping up all of the time.

Do your own research, and make sure that you are not getting stuck with nothing more than a fancy spreadsheet. You want a tool that is responsive and dynamic and flexible with your changing financial tides.

Call these companies at their customer support centers and see how long you have to wait. You want to deal with professionals. You want live customer support for life. You want free updates. You want a written guarantee. But mostly you want the best, most intuitive, interactive, simple to operate system, and not a static piece of software with an owner’s manual. Don’t fall for a 10 year projection on your payments. Keep in mind that the optimum numbers will change as your life happens.

If you do this right, you can be debt free in 1/3 to Â½ the time. You will save a fortune in interest payments. You can discover a whole new way of thinking about money, like how to make other people’s money work for you, instead of the other way around. Enjoy.

Home Mortgage Financing Facts

admin — Wed, 03 Oct 2007 12:30:50 +0000

If you are looking to buy a house, one of the first things that come to mind is how to get mortgage loan financing to purchase your property. A mortgage loan is essentially a lien on a property that has to be paid over a specified period of time. Once you have paid up your loan, you own the property free and clear.

There are a wide variety of various types of home mortgages each with its own advantages and disadvantages. Generally speaking, a mortgage represents a contract between a creditor (bank or lender) and a debtor (you). A creditor will finance the purchase of your property with you repaying the debt over a preset time period with interest on the loan.

The creditor that provides your mortgage loan financing has got the legal right to recover the debt secured by the mortgage. If you neglect to keep up with your payments or default on the loan, the lender will foreclose on the property. This is why a mortgage loan is considered a “secured loan”. The financing that the lender offers to you is secured by your home it’s self.

In order to be certain that you choose the mortgage that’s right for you and your specific financial situation, it’s a good idea to do your preparation prior to applying for financing. There are quite a few different options available to homebuyers and selecting one type of loan over another can make a large difference in your monthly payments.

At the most fundamental level, there are two different types of mortgage loan financing – fixed rate mortgage loans and adjustable rate mortgages. Within these two flavors, there are an assortment of different mortgage options each with a unique set of benefits and drawbacks. Before you begin looking for a new home, take the first step of trying out mortgage calculators to help you determine your budget and which loan type will work best for your situation.

Many mortgages provide you with the option to pay more than the minimum monthly payment or even pay off the loan in its entirety. This is useful if you intend to attempt to refinance in the future in the hopes of securing a lower rate. It’s useful to know that in most cases, you’ll be paying off the interest on the loan before you pay off the principal. In order to know the exact breakdown, look at the monthly allocation of your payments in your loan’s amortization schedule.

Whatever you choose for your mortgage loan financing, just make sure to do your due diligence prior to applying for a loan. It is also wise to shop for the best rate as mortgage rates can vary greatly from one lender to another. Over time, the interest rate on your mortgage loan represents a significant amount of money so it is very much in your best interest to secure mortgage loan financing that offers you the best advantage.

Jumbo and Super Jumbo Mortgages

admin — Tue, 31 Jul 2007 05:18:51 +0000

Have you ever wondered how people purchase those million dollar homes? Although many put down substantial down payments, several finance a mortgage just like the rest of us. These highly priced mortgages are known as Jumbo and Super Jumbo Mortgages.

Jumbo mortgages are loans that exceed $417,000 as of 2006. Super Jumbo loans are mortgage loans that are typically $750,000 or higher. These limits are adjusted yearly to reflect the current market changes.

Jumbo mortgages are also known as non-conforming loans because they do not comply with FHA underwriting mortgage limits that are set each year. Fannie Mae and Freddie Mac agencies buy the majority of mortgage securities from the loan originators. They have a limit on the maximum dollar value of each mortgage they will buy that is in accordance of the FHA underwriting mortgage limits. In 2006 it was raised to $417,000. Insurance companies and large banks usually help finance the excessive mortgages like Jumbo and Super Jumbo mortgages that can go up to six million dollars.

Jumbo and Super Jumbo mortgages usually have slightly higher interest rates than that of a conforming home mortgage, that is a mortgage under $417,000. Interest rates on these non-conforming loans also vary according to the home value and property classification.

If you are interested in a Jumbo or Super Jumbo loan you can go to jumboloans.com and fill out one single form. Afterwards up to four lenders will reply with their best offer. This form does not require your social security number. It is also not an application for credit but connects you to the top lenders that serve your area.

Afterwards, you can contact one or all of these lenders to find out more information about the loan process, requirements, and interest rates estimate for the home you potentially want to purchase.

Reverse Mortgage Types

admin — Tue, 31 Jul 2007 05:15:42 +0000

The reverse mortgage helps the seniors over sixty two years old to use the equity of the home to supplement an existing income. Reverse mortgage is loan advance to the home without repayment unless the owner moves, dies, or sells the home.

In the United Kingdom, reverse mortgage is more common as lifetime mortgage. Hence, the owner never needs to repay as long as the owner lives in the home. The reverse mortgage lenders distribute the cash as lump sum, regular payment, credit line, or combinations.

In the United States, the basic types of reverse mortgage are single purpose reverse mortgage, federally insured reverse mortgage, and proprietary reverse mortgage. There may be more types in different countries, but the main idea is very similar.

Single Purpose Reverse Mortgage

The government agencies and non profit organizations offer this type of reverse mortgage. It is generally low costs. Although the government agencies may be local or state, the mortgage is available in a few locations only. The purpose of reverse mortgage is specific such as home repair, home improvements, and property taxes. And, the owner earns low or moderate income.

Federally Insured Reverse Mortgage

The U.S. Department of Housing and Urban Development (HUD) backs this type of reverse mortgage. This type is more commonly known as Home Equity Conversion Mortgages (HECM). The upfront costs are high especially if the owner stays in short period of time. So, this reverse mortgage is costlier than Single Purpose Reverse Mortgage.

It is the opposite of Single Purpose Reverse Mortgage in which the reverse mortgage loan can be used in any purpose. And, the mortgage are widely available anywhere. There are also no income or medical requirements.

Proprietary Reverse Mortgage

The private companies backed or owned this type of reverse mortgage. It is generally the most expensive type of reverse mortgage. However, the owner may get more than other types of reverse mortgage. Generally, it works the same way as the Federally Insured Reverse Mortgage.

Choosing Mortgage Lenders

admin — Fri, 27 Apr 2007 16:23:57 +0000

There are many types of mortgage lenders and each one focuses on a special slice of the market.

Seller-financed

The seller of the property provides financing to a buyer. This type of arrangement is highly risky. Most sellers profit from borrowers twice: first, from the outright sale of the property, and second, from the interest of the borrowed money.

Savings and Loans

These mortgage lenders use the savings of private investors to provide mortgages. They are one of the largest mortgage providers in the country.

Mortgage Bankers

Here’s a rule of thumb in dealing with mortgage bankers: the bigger the bank, the better the rates they can offer. When dealing with mortgage bankers, you must be cognizant of the fact that they will control the loan throughout the whole process, from underwriting to servicing and even to the selling on the secondary market.

Mortgage Brokers

Brokers are the ones who sell loans for lenders, such as mortgage bankers. In the loan distribution network, they are at the storefront. It is possible to find a good mortgage broker through friends, co-workers, and online searches.

Credit Unions

These are owned by members and it is precisely for this reason that they give good rates and services. They operate in a similar manner as mortgage bankers.

Below are important things to note when shopping for mortgage lenders.

Finding Mortgage Lenders

It’s easy to locate mortgage lenders. If you know a real estate agent, ask this person to recommend a lender to you. If you know someone who purchased a home very recently, ask him or her for a referral. Finally, if you have a telephone and a phone directory, then turn to the yellow pages. Couple this with looking out for advertisements in print and broadcast media.

It is the Department of Commerce that issues licenses to mortgage lenders.

Reducing the Names of Your List

To weed out the names on your list, call the Department of Commerce or check their website. Go to the portion marked Consumer Info & Services and click on Enforcement Actions. You will then find a listing of any action taken against mortgage lenders.

The Department of Commerce updates its list of mortgage lenders with complains and violations. It has the authority to publicly reprimand a mortgage lender for failing to follow rules. Should another incident requiring government intervention occur, the department may choose to revoke or suspend the mortgage originator’s.

Finding the Best Rates

Comparative mortgage charts are printed in local newspapers’ real estate sections. This is a good place to look for a mortgage lender. Call the mortgage lenders who interest you and ask the following questions:

1. Are these the best rate and terms that I can qualify for?
2. Do I qualify for a better loan product that you are not offering to me?
3. Will I do better with another mortgage lender?

Take your time to shop around for mortgage lenders. Finding a mortgage lender is as crucial as finding a home itself. After all, borrowers’ relationships with mortgage lenders range between 15 to 30 years. For the relationship to last that long, it must be a match made in heaven.

Looking for the best mortgage rate? Visit our site today and get access to home loan lending rates from various competing mortgage lenders.

How To Get A Home Loan For People With Bad Credit

admin — Wed, 14 Feb 2007 11:05:52 +0000

Many people want to own their own home, a place to call their own. But the question of credit often arises. Is it possible to get a home loan for people with bad credit?

The answer is yes. But, there will be some stipulations. A home loan for people with bad credit will not necessarily be the loan the person or family will want to hold onto for 30 years, but there’s nothing preventing a person with bad credit from buying.

A home loan for people with bad credit will generally come with terms that aren’t the best being offered, but even still there are some advantages to going ahead with a loan. A home loan for people with bad credit will give the person or family an ability to get into ownership, which can in turn be a great investment and might even help them repair their credit along the way.

Anyone who wants a home loan for people with bad credit will likely need to examine some of the possible concessions they might need to make to obtain a loan. These include:

Paying more. While many banks will write a home loan for people with bad credit, they will charge more. The interest rates might be higher, or the monthly payments. The terms in regard to repayment time frame might even be longer. Getting a home loan for people with bad credit is possible, but it won’t always be the most desirable loan.

Getting a lesser home. Since a home loan for people with bad credit might come with payments that are higher than a person might be comfortable with, it’s often the case that a smaller, or less expensive home should be considered. This is okay for a number of reasons.

Going ahead with a home loan for people with bad credit is a smart thing to do if payments can be afforded. This is so for a number of reasons, not the least of which is the fact an investment can be built while credit is repaired. If the home loan for people with bad credit happens to be on a house the homeowner really wants, then it’s all the better. If they take the home loan for people with bad credit and then repair their standing, a new loan can be written down the road with better terms.

Proceeding with a home loan for people with bad credit also helps a homeowner lock in the price of a home. Waiting while credit is repaired could result in the dream home rising in value and price beyond a person’s means.

While it’s not always wise to jump at a home loan for people with bad credit, there are some advantages to doing so. As long as the lender is reputable and the home is a good investment, a home loan for people with bad credit is not always a bad idea.

Milos Pesic is an expert in the field of Credit Repair and runs a highly popular and comprehensive Credit Repair web site. For more articles and resources on Credit Repair related topics, Refinancing, Credit Counseling and much more visit his site at:

Mortgages With CCJs

admin — Fri, 02 Feb 2007 02:52:45 +0000

If you have a mortgage problem because of a CCJ you need to know you can resolve this problem. Mortgages with CCJs are actually quite common. If you don’t know what a CCJ is we would have to assume that’s a good thing. It’s short for County Court Judgment and even if you don’t have a mortgage problem you should read on because we could save you a lot of hassle later on.

A CCJ is a judgment that is issued by the courts if you fail to pay a contractual debt. Unsecured debt can file a CCJ against your house. They apply to the court for a claim form to be issued. You will receive a copy of the CCJ once the court has processed it. It will detail the amount owing and it will also detail the payment schedule. There is an appeal process you can file, or you need to file an admission form which says you agree you owe the total amount. Never ignore paperwork from the courts.

If you aren’t able to make the payment you will need to file with the courts and a hearing will be set. If you ignore the CCJ a number of things can happen, such a charge being placed against your property. If you pay the amount owed the CCJ will be removed from your property but if you fail to do this you could find it difficult to renew your mortgage and it will appear on your credit file for up to 6 years. If however you clear up the debt within 30 days it will not appear on your credit rating.

A CCJ is the one way a creditor can turn an unsecured debt into a secured debt. If you pay the amount due you will be issued a Certificate of Satisfaction which let’s all creditors know that you have taken care of your debt.

If you feel the CCJ filed in error you need to contact the County Court with the case number which will be on your credit file. If the error is legitimate a Certificate of Cancellation will be issued. And of course as previously mentioned if you pay the debt off in less than 30 days from the issue of the judgment it will also be removed from the Registry Trust Records.

If there is a CCJ issued against your mortgage you may find the when renewal time comes you have difficulty getting a renewal. High street lenders that use the computer based credit scoring system will throw you back as a no. Other traditional lenders will not want to issue a mortgage if a CCJ has been placed on your property.

That means you will need to look outside the box. Specialist financial lenders approach lending differently using real lending offers to access the situation so even with a CCJ it is possible to get a mortgage from these institutes.

The biggest problem you face is time. If you know you have a CCJ against your property and you know that your mortgage is coming up for renewal do not wait until the last minute to get funding in place. You are creating added stress and pressure on yourself that you could avoid by applying early.

As mentioned earlier conventional lenders are less likely to look at you. However if you have been dealing with the same bank for many years there is a possibility that you might get that personal touch. You can make an appointment with your loans officer and see what happens. You might see if they would add the CCJ to the mortgage amount thus wiping it out and giving you a clean slate.

Mortgages with CCJs are very common because unsecured creditors have caught onto this method of recouping unsecured debt. Don’t let it ruin your credit.

Andy Gorton is the founder of Fresh Finance, who provide UK debt consolidation and debt solutions