Wednesday, March 10th, 2010 at
3:20 am
Bad credit mortgage applications are subject to strict rules that are enforced by the mortgage industry regulator – the Financial Services Authority. The regulator regularly investigates whether the bad credit mortgage rules are being adhered to by mortgage brokers by way of test samples and mystery customers.
Test samples often show irregularities by mortgage brokers in relation to bad credit mortgage applications meaning that not all brokers are following the rules correctly. The regulations have been designed to stamp out mis-selling with the intention of protecting the pubic from unscrupulous mortgage brokers.
One of the most common ways in which mortgage advisors have been helping their clients to secure loans is by advising them to exaggerate their income. This practice involves inflating your income on a mortgage application to make it look like you earn more money than you actually do. The purpose of this activity is to secure a larger home loan than you otherwise would and therefore buy a larger or more expensive property.
One of the main reasons for a mortgage broker choosing to engage in such an activity is to win business from people who would otherwise not be able to obtain a bad credit mortgage. A broker who helps clients to fudge their numbers will quickly earn a reputation and will receive recommendations from existing clients. Such a practice is not only dangerous because the borrower may be securing a loan that they cannot actually afford, it is also fraudulent. This can earn both the mortgage broker and their client time in prison.
Another reason is that the procuration fees paid to brokers by lenders and packagers can be a lot higher for bad credit mortgage products than standard home loans. Brokers who are out to make a quick buck will therefore target borrowers who don’t fulfill the lenders’ criteria for clean credit products and do anything possible to ensure that the application is successful.
Mortgage brokers are now required to supply their bad credit mortgage customers with an Initial Disclosure Document (IDD) and a Key Facts Illustration (KFI). These documents detail the services the mortgage broker provides and also gives personalised information about costs and risks of products. The documents form part of the Financial Services Authority’s initiative to improve customer understanding of bad credit mortgage products.
Despite the increased regulation, some mortgage brokers still engage in fraudulent activities. However, the public should be aware that this type of broker is a minority within the mortgage industry as a whole. Examples of dishonest brokers have been emerging in the press quite regularly thanks to thorough investigations by the Financial Services Authority.
Some brokers have even been charged with falsifying their incomes on their own mortgage applications. This is usually done with buy-to-let mortgages so the broker can buy more investment property than they otherwise would. Advisors who are caught out by the FSA are usually banned from conducting mortgage business in the UK for life and their clients may also face criminal charges if enough evidence is available for the police to prosecute.
By: michael sterios
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Wednesday, March 3rd, 2010 at
6:47 am
people pursuing the ownership of a property could be a difficult dream. Fear of compromising credit history haunt many who desire to acquire property. However, many financial institutions have solutions that may come helpful for all who are in need of housing loan on bad credit history. Enjoy the services of bad credit mortgages solutions to overcome your poor credit history.
Nowadays, mortgage rates are fluctuating and producing numerous options for borrowers. Borrowers can choose their option and serve their needs to a great extent. Identifying the emerging opportunity, several mortgage companies are coming forward to provide quality solutions for bad credit mortgage loans. Fortunately, partnering with the right mortgage company, you can very easy to find lenders who offer programs with reasonable rates and no hidden fees.
How to find a Bad Credit Mortgage?
For getting the desired loan, a borrower has to find a list of potential mortgage companies that provide loans for bad credit. Once, you get the list, visit lenders whom you think can serve your purpose to the fullest. Find a good intermediary who holds enough information about the financial market to help you to pick up the best deal.
Taking a helping hand of an expert will help you to choose the right way to get the most desired results. Take care of the latest market trend and rising real estate market to get the most attractive rates, even if you’re a first-time buyer. But you have to know where to look.
Online Mortgage Companies
Internet is the best medium to get connected to online companies that deal into providing solutions for bad credit mortgages. Compare the offers and read the documents thoroughly. Also, ensure about the processing time for different companies. It is mainly because of the fact that usually companies take a lot of time in passing of the request, making it difficult for borrower to get the help at the desired time.
By: Roberto Luongo
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Saturday, February 27th, 2010 at
1:10 am
If you tried to get a bad credit mortgage in the past the chances of getting approved were pretty bad. All that seems to have changed for the better and these days bad credit mortgage lenders are more than happy to approve home loans for borrowers with all types of credit scores. Even the large banks and mortgage companies are jumping into the fray, meaning increased competition, more approvals and lower rates for everyone. Bad credit mortgage lenders know that this is a large segment of the home loan arena and it is also very profitable for them.
Both traditional mortgage companies and bad credit lenders determine your credit worthiness by looking at your credit score, also called a FICO score. These scores are reported by three major credit reporting agencies, Experian, Trans Union and Equifax. The higher your FICO score is the more likely you are to get a good rate on a loan, however the reverse is also true. Anything lower than 620 is considered bad credit by most lenders and most mortgage lenders won’t even offer you a home loan if your score is below 500.
While you can get approved for a bad credit mortgage pretty easily, the bad news is that some mortgage lenders will take advantage of your poor credit score situation and will hit you with dramatically increased interest rates. This is great for the lender, who makes more money from the interest, but really bad for you. Chances are if you have bad credit you’re in no position to pay exorbitant interest rates on your mortgage. Mortgage lenders will also require those with bad credit to put a 20% down payment on their home purchase which actually turns out to be good news since it means a smaller loan and smaller monthly payments.
Bad credit mortgage lenders are everywhere these days and they are especially noticeable on the internet where the cost of advertising is still somewhat cheap compared with traditional advertising places. This is also a benefit for us as lenders since it is both cheaper and quicker to get a mortgage online in many cases. It takes just minutes to fill out an online mortgage application and you can find out if you’re approved within minutes. This also makes it easy to get multiple quotes and compare the mortgage lenders rates.
Now you can take advantage of the power of the internet to help you get a home loan even with bad credit. Finding a bad credit mortgage lender is now quicker, easier and cheaper than ever. By searching online you can quickly get quotes from several companies and compare them to accept the best one.
By: Steven Walters
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