Friday, November 20th, 2009 at
4:28 pm
If you want to get a low credit score mortgage, you have probably found it difficult to get financing. This is because your bad credit score affects your risk level to lenders. If you need to purchase a house, then it is important that you take certain steps in order to improve your credit rating.
The first way to improve your credit rating is to check you FICO score. By checking your credit rating, you can find out exactly how bad your credit is. You should also make sure that scan over the report and make sure there are no mistakes on your credit history. If you find anything that is incorrect, you should immediately contact a credit report agency.
Another step you can take in order to secure a low credit score mortgage is to save up for a down payment. If you can save between 5-10% of the home value as a down payment, the lenders are more likely to give you a loan. Putting a larger down payment reduces the risk that lenders bear on the loans. You are also more likely to be approved for a lower interest loan as well.
You should also see if you can find someone with good credit to cosign the loan. A cosigner is someone that agrees to cover the mortgage if you fail to miss payments or default. This gives the lenders more security when they give you a loan, because they take into consideration the cosigner’s credit rating.
Before applying for a low credit score mortgage, make sure that you look around at different lenders available. It is important to see if you can get a better interest rate by looking online and seeing the different lenders available.
By: S Kung
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Sunday, November 15th, 2009 at
8:49 pm
‘Psst! Want an investment that pays up to 80 times as much as cash in some bank accounts but is absolutely safe and totally secure? And what about a 100 per cent guaranteed return that can be higher than financial watchdogs allow any investment company to use for forecasting future profits?’
Sounds like a snake-oil salesman scam, doesn’t it? But if your first reaction is, ‘You’ve got to be kidding’, then you’re wrong. Paying off mortgage loans with spare cash offers an unbeatable combination of high returns and super safety.
To see what we mean, take a look at the following mathematics. In this particular example, we’ve used interest-only figures for simplicity, although anyone with a repayment (capital and interest) loan will also make big gains. And, again for simplicity, we’ve assumed that the interest sums are calculated just one a year. That said, here’s the scenario:
Someone with a standard mortgage and with £100,000 outstanding at 6 per cent pays £60 a year, or £5 a month, in interest for each £1,000 borrowed. On the £100,000, that works out to £6,000 a year or £500 a month.
Now suppose that the homebuyer pays back £1,000. The new interest amount is £5,940 a year or £495 a month.
Compare the £60 a year saved with what the £1,000 would’ve earned in a bank or building society. The £1,000 could’ve earned as little as £1 at 0.10 per cent. And even at a much more generous 3 per cent, it would only make £30 – half the savings from mortgage repayment.
But you’ve forgotten income tax on the savings interest,’ you rightly say.
Ah, but the money you save by diverting cash to your mortgage account is tax-free. It must be grossed up (have the tax added back in) to give a fair contrast. Basic-rate taxpayers must earn the equivalent of 7.5 per cent from a normal investment to do as well. And top-rate taxpayers need a super-safe 10 per cent investment return from their cash to do as well.
After a payment is made, it reduces this year’s interest as well as that for every single year until the mortgage is redeemed. If interest rates go up, you’ll save even more. But if they fall, you’ll keep on saving and be able to afford to pay down your mortgage even more.
Some flexible or bank-account-linked mortgages let you borrow back overpayments so you can have your cake of lower payments with the knowledge that you can still eat it later if you need to. Alternatively, you can re-mortgage to a new home loan to raise money from your property if you need it.
By: Elizabeth Mathers Stankovic
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Wednesday, November 11th, 2009 at
3:59 pm
Look very well. When the times arrives to search for a home mortgage on your first home, a vacation home or even a simple refinance to lower your rate or consolidate debt. Whatever the case it is, it is wise to shop around first, before you decide on a particular mortgage loan.
Which mortgage company do I go with? Fortunately, mortgage companies are abundant and competitive, and they do want your business so rats given to you initially may be lowered or their fees when compared, just let them know. The world wide web has a lot of mortgage brokers and lenders available and it is relatively routine to find the right mortgage for you.
Need a low or zero down payment mortgage? While looking for a home in any real estate market environment, buyers or sellers market, you may want to think about purchasing a home with zero down or 100% financing. The plus of buying a home with zero down payment is that you can use the cash for other things instead of the home purchase such as furniture, yard improvements, home upgrades in the kitchen, bathrooms or even the loan closing costs. It’s entirely up to you.
Make sure your credit is in order. A requirement for buying a home with zero down is having excellent credit scores, or at least, scores above 720. At times, a homebuyer elects to get a loan for 100% of the home value, the lender will typically charge a higher interest loan rate. This is due to the lender taking on more risk than someone who puts 20% down.
Getting assistance with a mortgage. Mortgage brokers have gotten some bad rep lately. However, there are many good ones available, especially if you are dealing with a licensed individual as a mortgage company. Mortgage brokers are not real lenders, but do sometimes loan their own money, but more often than not they shop around for the best financing for you. A mortgage broker has access to hundreds of wholesale loan programs to lend to people with excellent credit to people with many credit delinquencies or a even special loan like a no income verification which is rarer nowadays but some still have it. More than likely there is a down payment involved as the 100% no income loans are gone. So if you think you fit into that category, a mortgage broker may be perfect for you. Permit up to four mortgage brokers or licensed loan officers to look over your request, and then wait for them to make an interest rate offer based on your criteria. The broker that finds you the best deal fees and rate should be the one you consider more.
In closing about your home mortgage. With a little effort on your part you will locate the home loan that fits your needs.
By: Mario Olivera
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