Don’t Give Up – Bad Credit Refinancing Is Worth A Try

November 17, 2011 | Author: admin

Even if you have a bankruptcy, foreclosure, repossessions or other issues to make your credit score low, you may be able to get bad credit refinancing. Unfortunately if you do have bad credit and a low score, the mortgage interest rate you get will be higher than others and you will have a limited choice of lenders.

When you decide you are ready to buy a home you not only have to find a home that fits but a mortgage that fits you also. This could entail contacting several lenders and getting their mortgage loan requirements. If you are looking to refinance and your credit is not great, you need to concentrate on finding a mortgage broker. Mortgage brokers partner with lots of different lenders. They know how to find sub prime or bad credit mortgage lenders. They match up your credit information with the lenders requirements and find the best loan for you.

You can find a mortgage broker either online or locally. Both have access to many different types of loan programs. Applying online is usually the easiest and fastest but some people are still wary about transacting business online. It is true that you don’t know who you are dealing with but online transactions are becoming the norm.

An online broker will look at your information, such as credit rating, income, debts, the proposed loan amount, and the amount of equity in your property, then do the initial search for matching mortgage lenders. Without leaving your computer, you can get up to four competitive quotes from lenders.

Don’t expect to get great rates if you have bad credit. It comes down to the amount of risk a lender is willing to take. Before applying for a loan, make sure you have done all you can to make your credit history look as attractive as it can. Get a credit report to make sure all your information is correct. You can get a free report once a year from each credit reporting agency. You can also get free reports and scores by signing up for credit monitoring services which might be a good idea while you are trying to improve your rating. Pay your bills on time, pay off what bills you can. Don’t close any credit accounts, but make sure they are in good standing.

Don’t lose hope. If your credit rating is over 550, you should be able to get a loan from somewhere. It might just take a little searching. It might also take a little time if you need to increase your score a bit first. Be patient and stick to your goals.

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Bad Credit Refinancing is Possible

November 13, 2011 | Author: admin

Despite what you may have heard, bad credit refinancing of a home mortgage is still attainable. Borrowers with a less than sterling credit history can still secure a refinanced mortgage with reasonable interest rates.

You may not be able to get a decent credit card (unsecured debt), but banks will still loan money on collateral, in this case, a house, which is secured debt. Their risk is limited since they can take possession of the home if the borrower fails to make regular payments. While most lenders are cautious about lending to those with a blemished credit history, if the borrower is not underwater (owing more than their house is worth) on the current mortgage, securing a refinanced mortgage at a better rate is achievable. This is absolutely NOT the time, however, to use your house as an ATM machine. That new car, plasma TV, and other frivolous consumer purchases can wait. In fact, most banks won’t even allow it, in this economy.

Deciding whether or not refinancing is a good move whether you have good credit or bad credit, is based on the current mortgage interest rate. If the plan is to stay in your house longer than three years, chances are a bad credit refinance will be beneficial. It generally takes about 4-6 years to recoup the refinance fees, (usually around $2000-$3000.) The savings on a lower interest rate mortgage will return those fees over time, along with a lower monthly payment. For instance, lowering a 6.5% 30-year fixed by just ½% will save thousands over the lifetime of the loan.

Before taking the plunge into refinancing a home mortgage, do some homework. There are free online mortgage calculators to help figure monthly payments and interest savings and compare types of loans.

Bear in mind that the loan payment amount does not include taxes and insurance. Ask a potential lender what a PITI payment (principal, interest, taxes, and insurance) would be for the amount you want to refinance. Be sure to leave wiggle room in the budget. A $1,200 payment this year could be a $1,300 payment next year.

Most lenders will require homeowners and mortgage insurance, especially with damaged credit. Don’t take the default homeowners insurance from the lender. It’s almost always more expensive than what you can find on your own.

Most of all be optimistic. Creative thinking and perseverance can prevail in any economy. Don’t be discouraged from investigating a bad credit refinancing. In the end, it could be the best move you ever made.

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3 Types of Reverse Mortgages

July 17, 2011 | Author: admin

Reverse mortgages could be complex. Due to the complexity, many senior citizens are now being cheated by loan companies. That’s why most reverse mortgage contracts require counseling.

The first type is the single purpose reverse mortgage. These are offered by some state and local government agencies and nonprofit organizations. They are not available in all areas. Call your county’s Department of Senior Services. Look in the white pages under your county listings for the phone number.

Single purpose means exactly that. The proceeds may be used for only the purpose specified by the lender and generally are only made to people with low or moderate incomes. If you call your county, be sure to ask if their reverse mortgage is a single purpose and what are the limits.

The second type of reverse mortgage is called a Home Equity Conversion Mortgage (HECM). The federal government insures these mortgages and they are backed by the Department of Housing and Urban Development (HUD). These loans can be used for any purpose. There are not income or medical restrictions. If you don’t plan on staying in your home for many more years, the fees associated with this type of loan may make it too high to consider.

HECMs also require all applicants to meet with a counselor from an independent government approved housing counseling agency. The housing counselors will explain all the options available to you, not just the reverse mortgage and help you decide which one is best.  For example, counselors should tell you about government or nonprofit programs for which you may qualify, and any single-purpose or proprietary reverse mortgages available in your area.

The third type is called a proprietary reverse mortgage. These are private loans backed by the companies offering them. In other words, they are NOT government insured.  Like HECMs, the upfront cost could be high for a proprietary reverse mortgage. P

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A Mortgage Broker May Help To Find A Bad Credit Lender

July 17, 2011 | Author: admin

Just because you had a bankruptcy, home foreclosure, repo or any other concerns, you may still qualify for less-than-perfect credit refinancing.

When you come to a decision you are positioned to purchase a house you not only have to get a house that will fit but a home loan that fits you also. You need to investigate several mortgage lenders to find out what you need to qualify with them. The best way to finance or refinance if you have bad credit is to use a mortgage broker. Mortgage brokers work with many different mortgage lenders. They specialize in finding loan providers who can make a poor credit loan. They match up your current credit history information with the lenders specifications and locate the perfect loan for you.

The online mortgage broker will take your credit information and quickly match it with lender requirements to find a loan that will work for you. They gather information about yourself and the property, including your credit rating, your income, debts, how much of a loan you’re looking for, how much equity you have in the home, etc. The mortgage broker will take that information and match you with a lender who is willing to work with you. You can find many mortgage brokers online. You must get comfortable working with someone that you cannot see. Your area realtor/broker may not have the most up to date information on loan programs that could suit you. There may be a company outside of your locale that can help you with your mortgage. You wouldn’t want to miss out on some great opportunities. With bad credit, finding a lender willing to give you a decent interest rate will be tough. The lender has to look at how much risk they take by loaning you money.

Before you start looking for a lender or a broker, you should make sure your credit report is as good as it can be. You’re entitled to a free credit report without strings from each on the three main reporting bureaus every year. Check your report carefully to make sure there are no errors which might bring your score down. Pay to enroll in a monitoring service if you want to keep track of whether your report and score are changing. Do not close any accounts; your credit score will be better if you have open accounts in good standing. You need to have at least a credit score of 550. Below 550, lenders consider you too much of a risk. If your score is above 550, feel free to start looking for brokers. Don’t expect too much, but be assured that you should be able to find something.

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