All About Bad Credit Mortgage Loans
By Castle Point Mortgage | March 22, 2008
Author: Alan Amerson
If you have less than a less than optimal credit score and you want to finance a home, then there are a few things you can do to better your odds of getting financing for a home. The first thing that you need to do is to get a copy of your credit report from all three major credit agencies that compile credit information in the U.S.
They are listed in the yellow pages and they have to provide you with afree credit report once a year if you request one. Pour over each one to look for mistakes and if you find any you need to contact them in writing and provide copies of the documents that prove they made a mistake.
The next thing to do is to try to do some damage repair on your bad credit by creating some good credit. If you have too many credit cards and credit card debt, pay it down but don’t pay them off because you have to have active lines of credit to create good credit. Consider buying something from a store on credit that reports credit information to credit agencies.
Then you need to get together some money to use as a down payment on the home and to cover the cost of the buying process. Then go out and see if you can find motivated seller that will carry a percentage of the note.
This means that you only have to finance a certain percentage of the home through a finance company and you then make interest only payments to the seller at a lower interest rate on the rest that they carry over.
A deal like this is going to have a limited time frame of say two or three years, or the seller won’t go for it. In two o three years the property will have accrued some equity, that you can then use to refinance the remainder that the seller held over.
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What Is Bad Credit Mortgage
By Castle Point Mortgage | March 22, 2008
Author: Keith George
If you are reading this article, then chances are that you have landed in a difficult position due to a loan you had taken. However you can reduce your mortgage burden if you apply some of the techniques mentioned below.
Bad credit mortgage also known as re mortgage or refinancing is the process in which you pay off one mortgage with the proceeds of a new mortgage using the same surety. Surety is usually a property, vehicle, valuables etc that you keep as a surety for the financier to give you loan.
Interest: A reduced interest rate is the most common reason why people go for a bad credit mortgage or a re mortgage. This is the easiest way to reduce your monthly loan payment. Use your calculator to consider how much will be your monthly repayment. Some loans have a prepayment penalty that is if you short close your loan then you have to pay some percentage of the loan, check if your present mortgage has that clause. Consider other costs like loan application fees, loan processing fees, appraisal fees and loan origination fees. Take all these considerations and check out your total savings and then take a decision on re mortgaging. As a rule of thumb, if the new loan has interest rate 2 percent less than the present loan then it is going to be beneficial in taking that loan.
Period: Another way to reduce your monthly payment is increasing the length of your loan. Either you can go for a new loan or extend the period of your present loan. If the present lender is unwilling to increase the period then you can go for a new loan.
Risk: One more reason for going for re mortgaging is to reduce the risk. Some loans have adjustable or floating rate with ceiling limits or no ceiling limits. You can opt for a fixed interest rate mortgage by refinancing. Generally the fixed interest rate is around 2 percent more than the floating interest rate.
Online Lenders: There are many online lenders who are offering reasonable interest rates for people with bad credit rating. The interest rate usually increases with the lower credit rating. However if you can get a collateral and a cosigner for loan who has better credit rating, then there are many people who offer a reasonable interest rate. These types of loans are called secured loans and are available at a lesser interest rate.
Other Methods: If none of the above is working, borrow from friends and relatives and get out of that loan then gradually repay your near ones. And of course avoid over expenditure and impulsive buying. Remember “those who buy what they need not, sell what they need”.
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How To Successfully Refinance When You Have Bad Credit
By Castle Point Mortgage | March 22, 2008
Author: Terry Parker
Obtaining a mortgage if you have bad credit is more possible today than it has been in the past. Perhaps lenders have become more lenient out of compassion for consumers who have had problems in the past. Or quite possibly, they have realized that borrowers who are seeking financing with a less than perfect financial record are just as much a profitable market as customers with a more favorable status. In any case, the result is positive for those borrowers that need to refinance their current mortgage, but do not have good credit.
Before you attempt to get new financing, you should find out just how bad your situation really is. You may find out that it is not as bad as you first thought. However, if this is not the case, the best thing you can do is be prepared when you approach a lender about a mortgage to explain your situation and see if they will be able to help you. Obtaining a credit report will equip you with much needed knowledge about your situation.
Once you get your report, review it to make sure all the information contained in it is correct. If there is inaccurate information dispute it with the credit reporting agency to have it removed from your report. In the event that you have to dispute the information on your report, wait at least sixty days for the changes to reflect on your report and to actually change your credit score.
Now that you know where you stand after reviewing your report, you can begin shopping around. The best thing to do is go to several different lenders so you have different quotes that you can compare. If you have a score that is less than about 600, you should use a company that specializes in sub-prime lending. These companies are more experienced in this type of lending and typically have special programs for these types of loans.
This is where knowing your credit history comes into play. When shopping around, before anyone pulls your report and checks your score, ask for a mortgage quote based on the information you already know, this will help to keep your inquiries to a minimum. Also, by doing this, you can find out on a somewhat preliminary basis if you will be approved or not. If the lender says that, based on your current situation and your past history, you are not able to refinance, you can move on to the next lender without having wasted too much of your time or resources.
You should expect to pay higher costs for a mortgage if your score is low. This does not mean, however, that the lender has free range to charge you excessive amounts of fees. Ask each lender to detail the fees you are being charged for the loan. This includes the interest rate, points charged, as well as any closing costs and refinancing fees. Review these fees with scrutiny and try to negotiate with them as much as possible. Even though you do not have a lot of bargaining power, you still have some.
Depending on the severity of your situation, getting help should not be too difficult. Since there are many lenders that work with consumers with bad credit, it should be easy to shop around and find help for your situation.
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