Select Page

Month: December 2017

Mortgage Loans for First Time Home Buyers – 5 Tips

First time home buyers often face some common barriers to qualifying for a new loan: poor credit, feeling a bit overwhelmed, and a lack of knowledge about available options. Here are 5 tips to get you on the road to home ownership. Tip # 1: Start now to improve your credit score: Having a low credit, or FICO, score is one of the biggest barriers to qualifying for a mortgage for first-time buyers. This is even true for people who have perfect payment histories and very little outstanding debt. Why? Because those two items only make up 65% of your credit score. The remaining 35% of your score reflects your status in these areas: length of credit history, amount of recently-approved or "new" credit, and variation in types of credit currently extended to you. All of these lighter three factors typically affect first-time buyers. What to do? Start improving your credit score right away. Tip # 2: Educate yourself about all of the loan factors: If you have never applied to or been accepted for a home loan before, it is natural that you may not know about all of the factors to consider when applying for a loan. There are multiple ways to structure your loan and a myriad of variables above and beyond just the rate you are getting. If you are just calling around asking for...

Read More

Mortgage Loans for First Time Home Buyers – 5 Tips

First time home buyers often face some common barriers to qualifying for a new loan: poor credit, feeling a bit overwhelmed, and a lack of knowledge about available options. Here are 5 tips to get you on the road to home ownership. Tip # 1: Start now to improve your credit score: Having a low credit, or FICO, score is one of the biggest barriers to qualifying for a mortgage for first-time buyers. This is even true for people who have perfect payment histories and very little outstanding debt. Why? Because those two items only make up 65% of your credit score. The remaining 35% of your score reflects your status in these areas: length of credit history, amount of recently-approved or "new" credit, and variation in types of credit currently extended to you. All of these lighter three factors typically affect first-time buyers. What to do? Start improving your credit score right away. Tip # 2: Educate yourself about all of the loan factors: If you have never applied to or been accepted for a home loan before, it is natural that you may not know about all of the factors to consider when applying for a loan. There are multiple ways to structure your loan and a myriad of variables above and beyond just the rate you are getting. If you are just calling around asking for...

Read More

Predatory Lending – Amazing Numbers

Sub prime Loans were intended to allow borrowers with weak credit records the benefits of owning a home. However, you always have to look out for predatory business practices. They exist in every industry and bloom in boom times. A typical predatory mortgage is a refinancing of an existing loan that is packed with excess or unnecessary fees and provides no tangible benefit to the borrower. Unfortunately, many of these loans are perfectly legal. Many of the loans entered into required no documentation of income or accepted very low incoming with teaser rates that ballooned down the road. the selling point was that the new owner could re-fi later at a lower interest rate and that that way get in, even though not qualified. Here are some astounding numbers Proportion of sub prime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93% Proportion approved without fully documented income: 43-50% Proportion with no escrow for taxes and insurance: 75% Percentage increase of interest rate on an "exploding" ARM resetting to 12% from 7%: 70% Typical increase in monthly payment (3rd yr): 30% to 50% Number of sub prime mortgages set for an interest-rate reset in 2007 and 2008: 1.8 million Valued at: $ 450 billion Year-over-year increase in foreclosure filings on sub prime loans with adjustable rates (2nd quarter 2006 to 2007): 90% Increase in...

Read More

Mortgage Types

A mortgage is a large commitment so you can understand why it is important to get one that reflects your individual requirements. It may seem hard to believe but there are only actually two main types of mortgage; repayment mortgages and interest only mortgages. It depends how you wish to repay as to which type you choose. However there are an extensive number of deals available for each type, which is where the difficulty in choosing the correct mortgage comes. In the market there are deals such as fixed, capped and cash back mortgages which can all be tailor to your needs even further! Fixed Rate Mortgages Fixed rate mortgages are suitable for individuals who have a tight budget and need to know exactly what their monthly repayments will be. A fixed rate simply means that the interest rate remains the same through a given period period by the lender. Even if base rates fluctuate your monthly repayment will stay exactly the same. Capped Rate Mortgages A capped mortgage is a variable rate mortgage where a 'cap' is agreed by the lender over a period of time. Throughout this period your mortgage is guaranteed not to rise above the stated 'cap'. When interest rates are likely to vary a capped rate would offer some security. A capped rate mortgage offers a compromise between variable and fixed rate products. Cash...

Read More

Second Mortgages For Bad Credit

If you need to refinance your home loan for covering debts, investments or other use, but have bad credit it can be difficult. Fortunately, the good news is that second mortgages for bad credit do exist. Getting approved for a standard 2nd mortgage is probably going to be difficult, so these kinds of loans help out those who are in a tough situation. Before you look for your second mortgage you should always think carefully about your financial situation. Why is it that you really need this loan? If it will help you work out your debts then it could be a valuable choice. Other people may use their second mortgage to fund investments or a new business, but these ventures always carry risk. When you've decided that you really need a second mortgage then you should look for lenders who specialize in bad credit. They do exist, and they will often offer more favorable terms for people in your situation than traditional lenders. The truth is that people with a poor credit rating are a high risk option for someone to lend money to, so the interest rates will be higher and you may not be able to loan as large a sum of money as someone with a good credit rating . Second mortgages for bad credit do exist if you are prepared to spend some time...

Read More