How To Apply For A Home Loan With Poor Credit
September 28, 2008 by Brian Valentine
Filed under Credit & Debt Education
When you have poor credit history and you are considering applying for a home loan, the process might be a bit difficult for you. The primary lenders, such as banks and mortgage companies, would not be too willing to approve your loan applications because of the risks involved. The better option here is to find a subprime lender and apply for a poor credit home loan.
There are many subprime lenders that you can find online. These are the lenders that specialize in high risk loans, so you won’t have to worry about having bad credit history to your name. Here are some tips you might find useful when looking for the online best subprime lender.
Study the complete loan process. There are still a lot of online lenders out there who would not hesitate to take advantage of your financial situation. These lenders realize that your options are limited and they will capitalize on that fact. Thus, you have to educate yourself about the whole process. Read the articles posted on the websites of mortgage brokers. Focus on the interest rates, fees, and financing types that you will deal with when applying for subprime loans.
Apply for quotes. Once you do find the lender whose offer best suits your needs, proceed to applying for quotes. It is important to be as detailed as possible when you apply for quotes. Do not just hand out limited information, such as your monthly bills and your estimated income. To get a quote that you can really rely on, make sure to fill out as many details as possible. Also, an effective way of qualifying for lower rates is to increase the amount for your down payment.
Compare true loan cost. When you compare costs, do not just look at the interest rates for there are other factors to compare as well. These include loan application fees, closing fees, and such. The true loan cost can be computed by adding the loan and amortization fees. Most online mortgage sites have an amortization calculator feature to make computation easier for you.
Follow up on your application. Filing your application should not be the last step. You should also follow up on it as well. This ensures the processing of your application faster, which in turn, brings the money in faster as well. Make sure to keep all pertinent records from all transactions that have been made. You may need them in the future.
Include refinancing in your plans. Upon completion of your mortgage plan, you should consider refinancing. Three years is the ideal time to consider this option since you will have established good credit by this time already. Remember that regular and on-time payments are a must with the poor credit home loan so that your credit score will improve in good time.
Getting the Best Bad Credit Home Loan Easily
September 28, 2008 by Brian Valentine
Filed under Credit & Debt Education
Even with the economy being what it is these days most people are finding it easy to get a home loan with bad credit, whether it is a 1st mortgage or a refinancing. You can get a bad credit home loan from a variety of mortgage lenders including banks, credit unions, mortgage companies and you can even get them online.
Whether you’re a first time lender or a homeowner with bad credit looking to refinance or get an equity loan you should take the time to shop around to different home loan lenders. Get a quote from each one that you find as they will differ, sometimes dramatically. Compare the rates to find the best one and don’t stop there. Once you’ve done your own research you can even contact a mortgage broker who might be able to get you an even better bad credit home loan. Mortgage brokers have extensive contacts and they specialize in getting mortgages for all types of borrowers.
A mortgage broker has one job and that is to match borrowers with lenders. They typically have access to many different mortgage lenders and will be able to get a wide variety of loan options for you. If you’re working with a mortgage broker to get a bad credit home loan ask questions. Find out what the current rate is and what the lowest quoted rate for the day is.
Don’t just accept a loan because of the monthly payment. Find out what the terms of the loan are and find out what your options are. By asking about the complete terms you’ll find it easier to compare different home loans. You should also be asking about current interest rate options. Are they offering you a fixed rate mortgage or an adjustable rate mortgage. If you get into an adjustable rate mortgage it will be cheaper initially, but if interest rates rise you could be in for quite a shock several years down the road.
You’ll also want to make sure you ask about the down payment required on any home loan. When shopping for bad credit home loans it’s not unusual to be faced with a 20% down payment requirement. Get this information and know how much you can afford.
By comparing rates and quotes from several home lenders you’ll have the best chance to get a bad credit home loan that meets your needs. Don’t agree to any loan where you don’t understand the terms completely. Take your time and try working with a mortgage broker who will answer all your questions without pressuring you. You should feel completely comfortable with the terms and rates of any home loan before agreeing to sign the loan.
Tips to Getting A Home Loan With Bad Credit
September 28, 2008 by Brian Valentine
Filed under Credit & Debt Education
You might be surprised to learn that home loans for people with bad credit are not as hard to get as some people would have you believe. Follow these 5 tips to getting a home loan with bad credit.
Find A Good Deal
Finding a good deal on real estate can be challenging, but it can also be very rewarding. Those of you with bad credit could benefit significantly if you find a good real estate deal to pursue. When you buy a house at a cheap price and you’re getting equity in the property immediately the loan officer sees your bad credit home loan as a partially secured loan. If you want to find out more about how this type of transaction can help you get a mortgage with bad credit talk to your mortgage broker.
Investigate Creative Financing
When you are looking for a bad credit home loan sometimes you need to get creative. There are a variety of ways to get into a home and get accepted for loans. Adjustable rate mortgages (ARM ’s ) are one very popular way that people use to get approved for a mortgage even if they have bad credit. I expect these ARM ’s to remain popular so long as interest rates stay low. Another way to creatively finance your bad credit home loan is by getting the seller involved. The seller can cover part of the down payment on purchase. Or you can have the seller carry back a 2nd mortgage that you repay back to them at an attractive interest rate. These creative methods can get you the extra $10,000 you need to get accepted for a mortgage.
Have A Down Payment
A down payment of even 3-5% can make a huge difference both in getting accepted for a loan as well as decreasing the interest rate that you receive on the loan. A drop of 2% in the interest rate on a $150,000 loan can save you over $72,000 in interest over the course of a 30 year loan. Plus you save by having a smaller amount to finance. If necessary you may even want to wait an additional 3-6 months before going for a mortgage in order to save more money for the down payment. That being said, keep in mind that even if you don’t have a down payment now you can always refinance in the future and add money to the refinancing.
Shop Around
While many mortgage brokers will try to get you to think that their skill and experience means that they are the only ones qualified to get you the loan you need this is not true. Don’t believe any mortgage broker who tells you that if they can’t get you a loan then no one can. It simply isn’t true. Especially now when you can find so many willing lenders on the internet it pays to shop around until you find a lender who is willing to work with you. The other good thing about internet lenders is that they are often experienced in securing loans for bad credit applicants so they can often work miracles for you. An online mortgage specialist is often the best person to contact to get home loans for people with bad credit.
Boost Your Credit Score
It may seem obvious, but I’ll say it anyway. If you want to get a bad credit home loan then boost your credit rating. This can be as simple as contacting the major credit bureaus and making sure that their records are accurate. Make sure all of your payments, hopefully for the past 12 months at a minimum, have been on time. If you’re considering buying a house in the near future do not take out any new loans or credit obligations as this can harm your credit rating too.
Bad credit doesn’t have to stop you from getting a mortgage even if it does make it more expensive. Home loans for people with bad credit are available from a variety of lenders who specialize in bad credit home loans. They can make it easy for you to finance your perfect home.
Loan Modification
September 27, 2008 by Brian Valentine
Filed under Loan Modification
You know I get this question all of the time… “What is a loan modification?” The way that a loan modification works is exactly how it sounds. First, you need contact your mortgage company and let them know that you are interest in modifying your loan terms.
They will then ask you several questions about your current bills and then plug all of the information that you provide them into their computer. you can expect a call back from your mortgage company regarding your loan modification in as much a 3 weeks.
They will then let you know your new loan terms. For example if you currently have an 8.250% – 5 Year Adjustable Loan then will modify your loan, and the your new terms would be 5.375% – 3 Year Fixed, which as you can see from the drastic reduction in the interest rate would save you a lot of money each and every month.
If you are behind in your payments, they will bulk all late fees and missed payments into the loan once you loan modification is approved. It’s almost like a streamlined refinance without an appraisal.
WAMU Bought By JPMorgan Chase
September 27, 2008 by Brian Valentine
Filed under Home Loan Information
Washington Mutual is now the property of JPMorgan Chase. The deal happened late Thursday night. For JPM the grand prize is (hands down) WaMu’s California branch network.
The thrift’s mortgage business has been sliding for years. On Thursday, The Wall Street Journal reported that a handful of hedge funds were considering making a bid on WaMu but nothing ever came of. The Journal wasn’t the only newspaper that bit at the story. So did we.
The rumor was true but the result didn’t match the rumor. Keep in mind that regulators, traditionally, have not been thrilled with hedge funds owning depositories…