Thursday, December 10th, 2009 at
2:19 pm
Personal Loans and Credit Card Offers to People With Bad Credit
For those in the unfortunate position to have that “less than perfect” credit score, there is good news. The industry has created some very “creative financing” alternatives to the traditional lending process.
I. Caveat Emptor – (Buyer Beware)
Don’t allow yourself to fall into a promise of a low-interest loan or credit card offer. There is simply no such thing. Too many times, personal loans and card offers are meant for personal gain and nothing else. Programs have been created in an effort to assist the individual with less than perfect credit to regain buying power. If you decide to place yourself into the position to do business with these lenders you are setting yourself up for financial failure.
II. Ask Questions and Plan
Credit Card offers saturate the World Wide Web, television and radio and every other form of media. They seem to promise you the world. Remember the adage, if it’s too good to be true, it’s not true. Be wary of offers boasting credit repair for a “low annual fee”. It is a good way to separate you from your hard earned money and give you nothing in return. Ask questions and seek the advise of your legal or financial council before making a decision to enter into an agreement with any company offering to repair your credit.
If the internet is an option for you, you should learn how to get online personal loans; the online loans have been developed to provide you with the best adverse credit loans as well as other Loan options.
Plan out your financial strategy and know your personal budget. If already in over your head, what good would it do to add another form of debt to your daily life? Reputable lenders are out there, but it is up to you to determine the good from the bad. Dealing with today’s market can leave a novice scratching their head and wondering how they will ever get out from the mountain of debt incurred over their lifetime.
Professionals are available to you for questions and answers about debt reconstruction. They can provide much needed legal and financial advise if you see that you are drowning in your debt. Many times during a financial crisis, we tend to seek the easy way out of our problems. In the long run, it is usually the wrong decision and we are back to square one.
III. The Good News
Credit repair is big business here and globally. Many reputable companies and organizations can offer you programs that will help you in your road to recovery for bad credit. Once you find yourself in the position of needing financial stable assistance, seek and you shall find. Your local, state, providence or federal programs are at your fingertips. Most of the time these organizations do not charge for these services, enabling you to take the correct path for financial recovery. As always, ask the questions and satisfy the programs your apply for will assist you in the future and aide you in rebuilding your credit and your future.
This article has been copywrited, All Rights Reserved
By: All Rights Registered
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Monday, November 23rd, 2009 at
5:15 pm
The financing vehicles have been in place for several years now for a borrower using some creativity with a seller to make 100% financing possible. However, the real estate market had been so hot in many areas in the U.S. the sellers did not have to even entertain anything resembling creative financing. With a softening market, creative financing is back as a helpful tool to allow sellers to unload their properties as long as an over supply of inventory exists.
Harold and Laura had been renting a home in a suburban area for three years. They had been digging out from under a heavy debt load of medical collections. Laura was leaving work one day and a truck had crossed the line and pinned her in her small car for a half an hour until the jaws-of-life was used to extract her out from her crushed vehicle. With a broken hip, ankle, eye socket and fibula a long recovery ensured and Laura was not able to work for two years. The other driver was at fault, but any financial recovery was years down the road as the other insurance company was playing hardball.
In the meantime, with constant harassment for the out standing medical bills and the weight of credit card and installment debt that existed prior to the accident was just overwhelming. Harold had been working two jobs just to meet the basic family needs. Family help was limited and really wasn’t expected. Laura’s therapy had been going on for a year now and real progress was being made. Her employer had kept her job open as a customer service representative ironically at a credit card service center. The benefits were limited and very little of the medical bills and rehab had been covered. Harold and Laura had been seeking some financial advice from a local bankruptcy attorney. It was decided that with their level of income and huge medical bills that filing a Chapter 7 Bankruptcy action might be the best thing to do for mental sanity and cash flow. A Chapter 13-payback plan would be crippling for many years to come.
As the bankruptcy attorney explained to Harold and Laura that in his practice example after example comes before him where just bad things happen to good people and that there was no shame in taking care of their financial affairs in this manner. The rationalization process followed.
Two months before filing the bankruptcy, the insurance company was offering a small settlement based on an allegation that Laura may have temporarily been distracted by talking on her cell phone and thus reduced her reaction time. Rather than put up a long protracted fight Harold and Laura, for better or worse settled for an amount that just covered her payoff on her totaled car. They were relieved of that installment. Their attorney for the accident urged them not to settle, but with Laura’s eminent recovery and the stress of the whole ordeal, they grabbed what they could at the time.
Harold and Laura received their notice of the Final Discharge of their Chapter 7 Bankruptcy. All the collections for medical bills, non-secured credit cards and one major medical bill that had resulted in a judgement being awarded for the first responding hospital had all been wiped out. They excluded their family car from the Bankruptcy matrix (which names all the debtors), which still had a $6,850 balance with a $295/month payment remaining.
They also excluded a credit card that they had for years and had a low balance and a low monthly payment. This allowed Harold and Laura to maintain two trade lines and their on time rental payment of some $1,250/month outside the Bankruptcy action. Laura had now been back to work at her old job for two weeks. She was fortunate to take advantage of a car pool with a fellow worker who lived a half mile away.
It was like the world had been lifted off their shoulders. Now Harold and Laura had their rent, one car payment and a small credit card and their home utilities. The cell phone service had gone by the way side many months before.
Even through the most brutal times and the lowest of the low, Harold and Laura, as their custom, visited Open Houses after church every Sunday. It was always in the neighborhood and never more than two home visitations. It was Harold and Laura’s way to cope with the dark cloud that had beset them. During this process, they became familiar with a local Realtor who took a very personal interest in their situation. The Realtor, named Betty, knew they were not ready to do anything until some things had been handled.
At the most recent Open House visit, Harold and Laura shared that they had put their financial challenges behind them. Laura was feeling great and off all her pain medication. Betty raised the prospect and questioned them if she could figure out a way to get them into a home at a little more than they were paying in rent with little or no money out of pocket, would they have an interest at least in hearing more about it. Harold raised his hands with palms up and a shrug of the shoulders, and shared that it wouldn’t hurt to listen to some possibilities. The accident had caused a detour in the quest to own a home, but it had not killed their dream.
Betty set up a meeting with the Realtor’s in-house mortgage broker to discuss their options. A joint credit report was pulled and as Harold at the time made the most money his middle score was utilized to qualify for a mortgage. His middle credit score was right at 500. The mortgage broker went on to explain that they would qualify for an 85% Loan To Value mortgage. Due to their lack of a cash down payment, it was added, that the only way that they could use this loan option would be with a seller held second of 15% loan to value with the seller also paying up to 6% of the contract selling price.
This would then give them a 100% Combined Loan To Value (CLTV). The loan would need to be a Fully Documented loan with verification for employment and income. The mortgage broker felt like he could present Laura’s employment gap due to the accident and use her current income for qualifying purposes. Totaling up the income versus the debts, it was determined that Harold and Laura could buy a home in the $175,000 range IF the seller would offer reasonable terms on the 2nd mortgage. Betty piped in that she had been sitting on a listing for six months and the owner now may have an interest in holding some paper versus renting the property again and deal with the tenant challenges on repairs and upkeep. The home was close to their current residence.
Betty was able to work out the deal with reasonable terms on the second mortgage that would keep the overall monthly payment down at least for the first three years. As the mortgage broker explained, that should be plenty of time to establish a better credit history and qualify for a lower interest rate loan in two years. As an added bonus, the seller agreed to pay all the closing costs and prepaid expenses such as annual hazard insurance and tax escrows plus replacing a leaky roof. Harold and Laura moved into their newly purchased home putting all the travails of the past in the rear view mirror.
Sometimes bad things happen to good people. In this current real estate market, there are creative possibilities. It won’t last forever; the time is at hand for seller help and creative financing.
Dale Rogers
www.sellerhelpsbuyer.com
www.brokencredit.com
By: Dale Rogers
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Thursday, October 22nd, 2009 at
12:00 am
Getting a home loan with bad credit has actually never been easier than it is today. Here are some tips to help improve your chances of success:
Find A Good Real Estate Deal – If you can find a property that has some equity in it when you purchase it, you may have an easier time getting financing on that property. To the lender it may be almost as good as if you had some kind of down payment on the property. Some lenders will consider the properties loan to value ratio when they consider the loan. Talk to your mortgage broker and see if this factor could help you get qualified.
Try Creative Financing – See if the seller would be willing to carry back a second mortgage on the home. This is where you set up a contract or agreement with the seller that you will pay them monthly payments, including interest of, let’s say, $150/mo on $10,000 dollars of the price of the property, as a second mortgage. Then, to make it nice for the seller, perhaps put in the agreement that the entire amount is due in full within 2 years or something. That should give you plenty of time to refinance and then the seller doesn’t feel permanently locked into the contract.
Save For A Down Payment – There are lenders who may be able to qualify you for 100% financing, even with low credit scores, but your interest rate will be much lower if you can put even 3-5% down. If possible, try to save as much as possible for a down payment. Sometimes it may be better to wait about 3-6 months to get into a new home loan if it means the difference of having a down payment. The interest rate could be quite a bit better because of that factor. However, if you don’t want to have a down payment, you can always refinance later for a lower interest rate.
Shop Around – There are some mortgage brokers out there that you will talk to who will say, “I can’t help you, and if I can’t help you, no one can help you.” But, if you persist in talking with other brokers, 10 minutes later you could be talking to someone who knows a way to help you, no problem. Most brokers feel that if they can’t help you, no one can. However, the ironic thing is that each broker is varied in the types of loans they can do. Some brokers have relationships with flexible mortgage lenders and others do not. I recommend applying online to mortgage services that will submit your application to multiple lenders. That way, your credit is only pulled once, and you can analyze offers from multiple lenders. To see our list of recommended bad credit mortgage lenders, visit here recommended bad credit
mortgage lenders
Improve Your Credit Score – There are some really simple ways to improve your credit score without spending too much time at it. All 3 major credit bureaus now have areas on their websites where you can dispute incorrect items on your credit. The process is very quick and easy. Make your current payments on time to help your score. Keep your number of credit inquiries down. Too many inquiries can hurt your credit score. If you want to buy a house, don’t apply for any credit cards, auto loans or any other type of loan if you can avoid it. For your reference, here are the links to all 3 major credit bureau’s websites: www.abcloanguide.com/credithelp.shtml
If you really do want to get into a home, don’t let bad credit stop you. There are lenders out there who can help you, it just takes some persistence. Apply with multiple lenders. Like I said, apply with mortgage services that specialize in bad credit mortgage loans and will submit your application to multiple lenders with only having one credit inquiry.
By: Carrie Reeder
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