Friday, February 12th, 2010 at
9:59 am
A bad credit mortgage gives borrowers with a poor credit history the opportunity to not only buy a home or refinance their current mortgage but the best opportunity to raise their credit rating over time. In most instances, whenever you apply for any type of financial product like a mortgage, the lending institution will pull your credit report.
In a nutshell, your credit rating is a compilation of your history of how timely you’ve paid your bills. Anytime money may be lent it’s used because it’s the best way for a lender to determine the risk involved for a particular borrower.
Tip – The online lending industry is very competitive. You will find many lenders who specialize in bad credit mortgage services.
Making the decision to issue or approve a bad credit mortgage is primarily determined using the credit score of the borrower(s). Credit scores can range from 400 to 800 with anything lower than a 620 poor and anything over a 720 very good. On the other hand, even if you have a credit score as low as 580 there are many lenders with mortgage programs that will finance up to 100% of the loan amount. Of course, the lower your credit score the higher interest rate you will pay and in most instances you will only be offered an ARM (Adjustable Rate Mortgage) that has a 2 or 3 year fixed interest rate and then it goes up.
Tip – Most states have lending laws that state a lender can only charge interest rates a certain percentage above the retail or normal market interest rate for borrowers with bad credit. Normally this rate is 5% – 8% higher but even that in many instances is extreme.
A myth about credit reports is that each time your credit report is pulled it negatively affects your credit score. This is true only if you apply for credit products like credit cards and only if you apply for a large number of them in a short period of time. However, this does not apply in the case of mortgage lenders, unless you applied for a mortgage from a very large number (i.e. like 15 or 20) of lenders within 30 or 45 days. Only then would it be slightly affect but in general when a lender pulls your credit report it will not be negatively affected.
Tip – For options in finding the best lender for you, check out the links below.
By: Kevin Erickson
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Thursday, December 24th, 2009 at
6:42 pm
Home Loan
Buying a home is any man’s dream come true and one of the biggest expenses of life. Recently demand for home loans has increased considerably; reason being is the need for an ownership house and also the easy availability of home loans. Home loans are available easily at very cheap and affordable rates. They have picked up quite a pace in recent world, because home is a place where people begin their life. The investment in purchasing a home is huge; some have the cash ready for investment but not in all cases, especially investing a lump some amount in a short period, hence for these mass of people home loan is a blessing in disguise.
To start off with a home search, it is always advisable to start with a discussion with a lender incase if home loan is being opted. These professional advisers give a tentative amount that would be available as a loan amount and based on that quote one can start on the home search. This in a way helps, because then we look for those houses that are within the budget and not beyond the resources. With home loan schemes available in today’s world, life has become quite easy for buyers; they don’t have to think much about the availability of finance.
Purchasing a house can be an overwhelming experience for anyone but one has to be a little careful with certain aspects relating to home loan. Before applying for a home loan one should set in mind the amount that he/she is going to borrow. If no target is set then one might over exceed the loan amount that might become cumbersome at the time of repayment. Besides, if the loan amount is more than the need then it is used for other expenses, which are of less priority, and even interest is being charged on that extra amount. Interest rates, which is often considered as an unwanted burden always comes complementary with a home loan. Interest rates are the extra amount that the borrower has to pay along with the loan amount taken, so borrower needs to see that he/she gets the cheapest rate for the home loan amount.
Home loan is usually taken from personal banks or through financial institutions, hence, the one who offers the cheapest rate of interest with long term is what buyers look for. The repayment procedure also varies accordingly from monthly/quarterly/yearly basis as per the buyer’s discretion. The buyer initially has to pay a certain % of the loan amount as down payment and then the rest amount is paid back periodically as decided by the borrower.
Availing of a low rate of interest also depends upon the borrowers credit status; if the borrower has a bad credit scored then he/she might be charged a higher rate of interest than the one who has a good credit history. This is because of the repaying capacity which ofcourse is any time better for people having a good credit history as a good credit score tells volume about the debtor’s financial background. Hence, people with a steady income and good credit score can avail home loan faster and also at cheaper interest rates.
Hence, borrowers should do a good research before applying for a home loan, apart from visiting various banks and financial institutions we can also find best deals online. Through Internet we can get quotes from various lenders and thus borrower can compare the best deal as per his/her need. You can even fill up an online application stating your requirements and details about the home loan along with the contact address and then the company’s executive plans a budget mentioned in the form as per your requirement that is apt for you. Home loan are a boon to us, the best way to fulfill our desire to own a house. Thus, one of the sources that can help you to fulfill the dream of possessing a house is Wizard Loan Approval
By: Jeff Saunders
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Tuesday, November 24th, 2009 at
6:17 pm
What makes mortgage rates fluctuate? They are talked about so often that you would think this is common knowledge. But the simple truth of the matter is, most people do not even know how these rates work! Among the many entities that people think are the cause of their movement are the Fed, the economy, inflation, the President, etc., etc. The real answer is that rates are moved by a number of factors, one of them being, well, you!
The Money Tree
Money for mortgages comes from a variety of different sources. Some of it comes from banks and brokerages, but a lot of it comes from investors in the capital markets. Bonds buyers come to these markets looking for good buys. Sellers of these bonds must compete with each other to get the money of these buyers. They do this by offering varieties of the investment instrument which differ with regard to risk structures and returns over time. These products also compete with other investment instruments like U.S Treasuries, corporate bonds, foreign bonds, etc.
Investor demand moves mortgage rates. They have plenty of places to put their money. Their choices directly affect the movement of rates. In a crowded marketplace, mortgages must be considered attractive enough to invest in. Of course, it is not really as one-dimensional as it may seem. Mortgage rates are affected by any number of factors in the capital markets alone.
The Other Things
Other investments also affect mortgage rates. For example, there is a very direct relationship between mortgages and U.S. Treasuries. Another factor includes “volume” available. Unlike other investments, no one can really tell how many mortgages will be on the market at any given time. Drops in interest rates produce large buildups of loans. This means that the supply of bonds goes up in a relatively short period of time. Investors cannot absorb this at once. Oversupply with little demand devalues the investment instrument.
There are also time problems when it comes to mortgage pricing. It takes hours or days for prices changes in capital markets to get to wholesalers or retailers. Also, not all of the changes are fully reflected in street prices. Depending on the fluctuation, rates may remain static. Another example is when a minor increase in bond yields is followed by a reduction later in the day and does affect the mortgage rates at all. Inflation also plays a large role in fluctuations.
All this is an obvious oversimplification of a very deep topic. You would do well to read up some more on this. This is especially true if you are thinking of obtaining one or getting a new one. You must be armed with the right knowledge to make wise business decisions. That is the only way you will ever show a profit in the end. Wise business decisions are based on what you know. So improve what you know by reading and consulting people. In the end, your bank account will thank you for it.
By: Rony Walker
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