Home Refinancing For People With Bad Credit – Who Qualifies
Posted on | August 31, 2010 | No Comments
Home Refinancing For People With Bad Credit – Who Qualifies For A Sub-prime Mortgage Loan?
Sub-prime mortgage loans gives people options, including those with bad credit. Sub-prime
lenders dont have to follow conventional underwriting rules, so they can work with anyone, regardless of their credit background. They can also provide more lenient terms than traditional lenders.
Qualifying For Sub-Prime Financing
Basically, anyone can qualify for financing with a sub-prime financing company. No matter your credit situation, even if you are just out of bankruptcy, you can apply with a sub-prime lender.
They also work with people who have excellent credit but need more flexible loans. For instance, if you want a loan above the conventional caps, you will have to work with a sub-prime lender to get a jumbo loan. 100% cash out refinancing is also easier to get with sub-prime companies.
Refinancing Options With Sub-Prime Lenders
Ideally, refinancing your current mortgage should lower your rates and monthly payments. Sub-prime lenders can do this, along with offering you cash out options. So whether you want all or part of your equity, you can usually cash it out at lower rates than if you took out a second mortgage.
Refinancing can also improve your caps if you have an adjustable rate mortgage. Just remember that caps, if too low, can extend your loan period. When negotiating caps, its important to read the fine print and know how they will affect your loan period.
Shopping For A Financing Company
Give yourself enough time to shop for your next mortgage company so you can be sure you are getting the best deal. Rates can differ widely between sub-prime lenders, so look at a number of different companies. Also remember that many traditional financial companies also offer sub-prime loans. So you have more choices than ever before.
To get the most out of your researching, ask for loan estimates on the same refinancing package. That way you can quickly compare similar numbers. Also look for any additional fees, such as early payment penalties. Sometimes these fees can be eliminated through a quick chat with the lender.
Searching online for information on lenders will speed up the refinancing process. In no time, you can be approved for your new mortgage and start saving money.
Home mortgage quote problems? The likely culprit is your Credit.
Posted on | August 24, 2010 | No Comments
Home mortgage quote problems? The likely culprit is your Credit.
Your credit has everything to do with home mortgage rates as lenders charge more points and higher interest charges to consumers with bad credit. Poor credit always implies greater risk, so lenders are entitled to be compensated for the risk they are taking.
If you are a borrower who enjoys good credit, however, you should at all cost avoid getting into deals where the rates and points are at par with those for bad credit. There are plenty of cases of borrowers with good credit being charged the same rates as those with bad credit. Enjoying good credit requires effort and sacrifice, so you have every right to be charged much better rates than consumers with bad credit. Even if it means having to look a little harder to find them, you should pay rates that you deserve.
Explaining Risk and Loan Points
Every point on a loan refers to the fee amount of one percent of the loan amount. Consumers with good credit may be charged no points at all while bad credit can earn as many as four points. However caution is necessary as unscrupulous lenders may charge up to ten points if they think they can get away with it. It is up to you to make sure that they dont, in your case.
Nevertheless there are situations where the lenders have to take risks far greater than the average. In such cases it may be justified to be charging more than the normal rates. Brokers often claim that they charge higher points as they are taking the risk of lending to those no other lenders will lend to. More often than not, this may not be true. With sufficient effort and time, a consumer will be able to find a lender willing to lend him the loan. These lenders are much more likely to treat the consumer in all fairness.
Not giving due attention to points being charged can prove costly to a consumer. Different terms may be used for points with some examples like origination fees, broker fees, discount fees and yield spread premium.
Front and Band End Points
Despite these terms, there are two basic types of points. The first is the upfront fees that the consumer pays to the lender. It is a form of compensation paid to either the lender or the broker for making the loan transaction possible.
A back end point is the other type of points that the lender pays to the mortgage broker. Sometimes they act as extra incentive for a particular loan. But it is mostly for loans given at a higher rate of interest as a reward to the broker. The problem occurs when these points spur unscrupulous lenders to hike up the rates with the consumer being absolutely unaware of it.
Finding An Online Mortgage Broker
Posted on | August 17, 2010 | No Comments
There are literally thousands of mortgage brokers out there today. Multiply that by the number that you can find on the Internet, and you will be sure to spend many long hours in front of your
computer sifting through them. So, with all the hits that you will get when you search for ‘mortgage brokers’ online, how do you pick one that is right for you and a good company to work with? Here are some ideas to help you out:
1. When searching, try to narrow your search as much as possible. If you are looking for a 30-year, fixed rate, second mortgage for example, put that in the search. This will help you to sort out those companies who do not offer the service that you need. You will immediately get results of companies who do these types of loans and mortgages, so you can start at a smaller place than getting swamped with millions of hits.
2. When looking through the company’s site, go to the ‘about us’ page first. While you might be tempted to look at their services and such, find out about the company before you fill out any forms or offer up any personal information. Some online companies aren’t allowed to provide mortgages for certain states, or they might not be a real company at all, so you are better to find out about them before you give out personal information to someone.
3. While filling out the form, make sure that you check the box or fill in the line that requests a broker to contact you. This will help you to get a one-on-one, personalized service and allow you to ask questions that aren’t on the form or find out information that wasn’t covered on their site.
4. When talking to the broker, make sure to ask every question that you can think of so you are completely comfortable with the broker and the company. If you feel the least bit apprehensive, you should move on to another company.
Basically, just remember to trust your gut feelings when dealing with a mortgage broker. There are so many out there that are great companies, and it really doesn’t take much to find one, you just need to do a little searching to find one online. So, fire up your computer, grab a coke, and start typing away. You are sure to come up with a list of companies that you are completely comfortable with and have that new mortgage secured in no time!
Do You Know How To Find The Best Mortgage Deal?
Posted on | August 10, 2010 | No Comments
Do You Know How To Find The Best Mortgage Deal?
People will spend months or even years planning to buy their own home. They will work hard to build good credit. They will save a sizable down payment. They will search for the perfect house. Then they will settle for the first mortgage they see.
What is wrong with this picture?
It is important to remember that if you have good credit and a down payment then you are in the driver’s seat when it comes to negotiating a mortgage. You are the dream customer that lenders want on their books. Even if your credit is not perfect and your down payment is nonexistent you are still an attractive client for many lenders.
Repeat this mantra whenever a lender acts as if they are doing you a favor by lending you money: I am going to give them a lot of money. Yes, you are. Over the next five to 30 years you are going to pay a lot of interest to this lender as well as repay the principal they originally put up. They are not giving you anything. This is a business deal and the lender stands to make a lot of money so you need to protect yourself to get the best deal you can.
While most lenders tend to make you think you should be grateful to them for taking this huge risk on you, it really is the other way around. A mortgage lender can’t lose. If you honor the deal they will make a lot of money and if you don’t honor the deal then they simply take your house back and keep the interest you paid in the meantime!
However there is an even bigger fallacy that lenders like to perpetuate. They don’t want you to know how desperate they are for your business. Look around and you will realize the truth of this. Check out the television, radio, and print ads that abound and you will see the mortgage lenders are getting pretty competitive.
That is why you simply must shop around to find the best mortgage deal available for you. In the end you could save yourself thousands of pounds. Here are five ways to help you find the best deal:
~ Shop around – Get quotes from various lenders. Look at local and national lenders and don’t overlook the internet.
~ Compare terms – Interest rates vary from lender to lender but lenders offer different interest rates depending on the terms of the mortgage. How long will it be (15, 20 or 30 years)? Will it be variable or fixed?
~ Tweak some of the optional items that you control, such as the type of insurance you will carry and whether or not you will use escrow for taxes etc.
~ Adjust your down payment – Sometimes being able to increase the percentage of what you are putting down can make a difference in the lenders terms (similarly buying a less expensive house will work the same)
~ Haggle – Yes! Lenders often act as if their rates are written in stone but this is not the case. This is where shopping around can really come in handy. If you can show that you’ve got a slightly better deal with another lender then sometimes another lender will lower their rate to beat the competitor. Hey it’s worth a try!
Just remember that you are in control of your future. You can choose whether or not to accept a mortgage lenders terms. There are a lot of lenders out there so you do not need to sign with the first offer you receive.
One last hint: It might be best to go through this process before you’ve found the home of your dreams! You can get preapproved for a mortgage with most lenders and that removes the pressure and worry of losing the home of your dreams while you negotiate with a lender. It also puts you in the driver’s seat when you are negotiating to buy that dream home when you finally find it if you already have a mortgage ready to go.
Compare Mortgage Rates
Posted on | August 3, 2010 | No Comments
Mortgage has become one of the most important elements in modern day living and a key concept that might help one out in fetching the intended amount of money one needs to fulfill his or her
dream. However, the very term mortgage has been derived from the French word meaning dead page. Nonetheless, a mortgage is a device used to create a lien on real estate by contract. It very efficiently used in creation of a lien on a contract basis.
The mortgage as a lien is usually created on real state – a house, for instance. It is more often used deliberately as a method by which individuals or businesses can buy residential or commercial property without paying the full value upfront. The borrower, (the person concerned for taking the real estate by paying a part of the total money on a contract basis) is often called the mortgager. The mortgager then uses a mortgage to pledge real property to the lender, who is more often called the mortgagee. It is usually put forward in the shape of a security against the debt (also called hypothecation) for the rest of the value of the property.
Therefore, it is quite evident that a mortgage is of prime importance to the mortgager, and perhaps more to the mortgagee. There are a number of banks and financial companies who provide a whole range of mortgages at different rates. It is also quite obvious that the individual will calculate and look after his own benefit as he would compare the different mortgage rates that are available on the market. This comparison becomes an important activity, as the individual in question is always concerned about his monetary benefit.
Commercial Mortgage Financing
Posted on | July 27, 2010 | No Comments
Ever wondered what you could do with a commercial mortgage? Well, to be quite candid, there is a plethora of ways to make use of a commercial mortgage. Such a mortgage can be used to finance many different types of properties, so lets take a minute to review these properties. Of
course, not all commercial investments are created equal. Some inherently involve more risk than others. As a result, some banks and financial institutions that offer commercial mortgages may or may not offer a product that finances one of the following. As always, it will be up to you to shop around and find a commercial loan broker that offers a commercial mortgage package that fits your needs.
Apartments Great investment opportunities exist with apartments. Apartments serve as a great form of securitization for a commercial mortgage. They also prove to be great income properties, as apartments that are managed well can bring in positive cash flows at the same time as equity is being created.
Health Care Facilities A commercial mortgage can also be used to finance health care facilities. Such an investment provided two distinct advantages. First, you are investing in a traditional business that has a growing market and customer base. Second, you are also making an investment in land and facilities that will appreciate over time, creating positive equity for you. Investing in this type of property and business is not so far fetched when you realize just how accessible a commercial mortgage really is.
Industrial Though industrial spaces are neither glamorous nor thrilling investments, they are certainly valuable. Most lending institutions will offer some sort of commercial mortgage that allows for investment in industrial spaces. Such an investment typically proves to be a solid investment since industries are always growing and this type of space will always be needed.
Manufacturing If you are interested in expanding your business and increasing your manufacturing capacity, a commercial mortgage may be the way to go. You can use a commercial mortgage to finance the expansion of your manufacturing facilities and thus grow your business in the process.
Warehouse Not very many businesses can continue to grow and prove successful with no room for inventory. If you find your business is ready to take it to the next level, and you are short on warehouse space a commercial mortgage can help you as well. Many large lending institutions have a commercial mortgage designed to finance warehouse expansion, so dont hesitate to contact your commercial loan broker today if you are ready to expand.
Retail Structures Even retailers need financing to build new stores, increase their accessibility, and grow their business. When retailers are ready to fund a new project, they turn to a commercial mortgage as well.
Office Complexes Office parks and buildings are financed the same way as all the others, with a commercial mortgage. Office complexes also prove to be great investment properties for investors in the real estate market, as the risk of vacancy in office complexes is much less than that of retail spaces.
You might have noticed a trend while you read this list. Indeed, a commercial mortgage can be used to finance just about any kind of commercial property. So when you are in the market for a commercial property, go visit your commercial loan broker.
Choosing A Mortgage That Fits Your Lifestyle
Posted on | July 20, 2010 | No Comments
There are many different types of mortgages with a plethora of features and fees. Choosing the right kind of mortgage based on your life style could not only make it easier for you to repay the loan but also save you thousands of pounds.
First, make an honest assessment of your financial position. Do you have a stable job? If you are in business, does it yield you a regular profit? Calculate your gross income. If you have a very low income that deters you from saving anything then you would do well to opt for a low down or no down payment mortgage. If your income is good enough to have allowed saving for the down payment its better that you make 20% or more down payment. The less you owe the better.
Are you sure that you can repay your loan after a sudden loss of employment? On the other hand, if you as a couple are repaying together, what if your spouse loses their job, can you still manage it? A longer amortization period (30years) would mean that you pay a smaller amount monthly that would be lighter on your monthly budget. Also, remember that you pay a higher interest and a larger amount overall incase of mortgages that are spread over longer periods. A shorter (15years) amortization period would mean that you pay a larger monthly installment, but a lower interest rate and hence a smaller price for the house.
A job that pays you bonuses, or retirement benefits where a lump sum amount is expected can be helpful in making large down payments or clearing balloon mortgages.
Choosing between a fixed rate loan and one with an adjustable rate is always a gamble. If the fixed rates are low now, its better to go for that option. The choice between ARM and FRM is based on the wider economic outlook, whereas the choice of mortgage is more dependent on your financial situation.
Mobility is another factor that has to be actively considered when deciding about mortgage. Will your job require you to move away from your current place of residence to another? Do you see yourself out of a house in 4-5 years? Alternatively, you do not intend to move out of the towncity where you live, for the rest of your life. A short stay may not work in favor of buying a house altogether, unless rent prices in the area where you live is higher and real estate prices are appreciating faster. If you plan to sell the house in 5 years and move out then opt for mortgages where the interest rate is lower in the first few years of the mortgage. Better still go for interest only mortgage where you pay only the interest for the five years you stay in the house. ARM mortgage loans are also suitable for short home owning periods. The rate in ARMs is very low during the first few years. Definitely, the interestinterest+principal paid will be less than the rent you would have paid. People who want to move to a bigger house after a few years can also consider these mortgages.
It will be assumed here that you have thought well about the kind of property you have decided to buy. Just make sure that you are entering into a debt with complete understanding of all the pros and cons.
California Mortgage Brokers And Lenders Loan Approvals With Good
Posted on | July 13, 2010 | No Comments
California Mortgage Brokers And Lenders Loan Approvals With Good Or Bad Credit
Mortgage brokers have the ability to locate the perfect home loan for your credit type. Before lenders began offering a range of home loans, getting approved for a mortgage loan with poor credit was impossible.
View our Recommended California Mortgage Brokers Online.
Today, there are many loans and lenders that focus on both good and bad credit mortgage loans.
Options Available to Homebuyers with Good Credit
Naturally, having a high credit score will present better mortgage loan options. For starters, if your credit score is above 680, you are considered a prime borrower. This status allows you to apply with any mortgage company and receive the best rates.
Furthermore, those with good credit may qualify for zero money down home loans up to 107%. This financing option is perfect for homebuyers who seek assistance with down payment and closing costs. Moreover, real estate investors may take advantage of 107% financing in order to have enough funds to make improvements to the property.
Individuals with good credit may also qualify for a no documentation loan or a stated income loan. Both options are ideal for the self-employed or income thats difficult to verify.
Poor Credit Loan Option
If you have poor credit, your loan options for a mortgage are also great. Lenders realize that excellent credit is hard to maintain. Bad credit happens for many reasons, and can affect good people. For example, loss of employment or serious illness may create a financial burden. In this instance, it becomes difficult to maintain regular payments.
The majority of mortgage lenders and brokers believe in second chances, thus they offer several loan programs that cater to low credit scores. This include 100% financing loans, no money down home loans, VA homes loans, low income home loans, etc.
How to Apply for a Mortgage Loan
If new to the home buying process, mortgage lenders and brokers will assist you with the application. Before completing and submitting a mortgage application for approval, request multiple quotes from different lenders. If using a broker, multiple offers are automatic.
There are several benefits to obtaining several mortgage quotes. Lenders offer different rates and terms. By acquiring several offers, you can compare varying loan packages and select the finance option with the lowest mortgage rates.
Best Inexpensive Mortgage Leads
Posted on | July 6, 2010 | No Comments
Some loan officers have had tremendous amount of success buying mortgage leads, while others have wasted tremendous amount of money. Some of the best lead sources are kept secret – wouldn’t you, if you have found a good lead source?
Surely, it is nice to spend money on mortgage leads that convert well into customers, but buying leads is often a risk not many people are willing to take. What is even better is to generate your own leads that convert well and are also inexpensive to generate.
Here is one technique that you can use to generate free mortgage leads. In summary, you want to find online forums and discussion boards that talks about real estate and or mortgages. You would then register as an user to these forums and establish yourself as a mortgage expert.
Here is how you do it: Pull up a web browser and head to Google search engine and type in “mortgage forum” and that should give a plenty of online discussion boards related to mortgage. Before signing up for any of the forums, study the forum topics and see what people are talking about in these forums. Are they mostly home owners? Are they mostly real estate professionals like you? Now, do not disregard mortgage forums where many real estate professionals or loan officers hang out, because sometimes they can be your best mortgage lead source. Sometimes you will find posts and requests from other loan officers for co-op opportunities.
Once you have come up with a few forums you would then go ahead and register for a forum account. If you have a website, make sure you put that website in your signature profile if the forums allow – and most of them do. Here is what not to do: Do not simply sign up to a forum and start blasting your ad all over! It may be helpful that you introduce yourself to the discussion board telling people who you are and what services you provide. Make sure you observe the rules of each forum. Start breaking into the forum by responding to other people’s posts and provide valuable views and advices. Once you do that, you establish ground in the forum and you will build a reputation around you.
This technique, although free because you do not need to spend money on advertising, may take a while before you see some qualified leads coming your way. However, it is probably one of the best inexpensive mortgage leads generation techniques.
Being prepared when structuring a private residential mortgage note for
Posted on | June 29, 2010 | No Comments
Being prepared when structuring a private residential mortgage note for re-sale.
I have come across many note sellers that ignore the advice of being prepared. Properly
structuring a note for resale can be the difference between selling the note fast and with little friction as opposed to selling yourself short or worse, not selling the note at all. In order to properly structure a mortgage note for resale is as follows:
1) Get the biggest down payment possible. 25% is the Note Buyer’s ideal amount in a perfect world although, you can definitely get away with 15% – 20% if need be. Anything under 15% equity becomes very risky for a Note Investor. In the case of a down payment under 14% equity, you will have a very tough time getting a high bid on that note. Anything under 10% down, will unlikely sell at all.
2) Make sure you (the seller), pull credit on the potential borrower. 600 FICO score – 700 FICO score would be ideal. Remember; the worse the credit score is, the bigger the down payment you should require! Make sure you keep a copy of the credit report so you may present to the mortgage note investor underwriting the transaction. As far as credit scores, 650 or higher is considered great to excellent credit. 610-649 is good, 609-590 is fair 589-500 is poor and below 500 – don’t even bother. Also try to gather D.T.I. or Debt to Income information from the borrower as well. How much money shehe has coming in per month verses what pound amount is going out per month. A standard credit report will show you what the borrowers monthly bills are. All you need to do after that is get an accurate pound amount of what the borrower truly makes after taxes. This way there will be no surprises for you or the Note Investor and this will insure you the highest bids out there! 45% is the max D.T.I. ratio you should allow. This means, if the borrower’s income is 5,000.00 per month, 45% DTI ratio would be 2,250.00 (5,000 x 0.45 = 2,250.00) in debt per month. The borrower only owes 45% of what they make to monthly debt.
3) It helps tremendously if the seller orders and completes an appraisal before submitting the note to a Note Buyer. The reason being, presenting an exact legal appraisal to a Note Investor allows for a more accurate bid, thus a hassle free transaction. This way when the note is underwritten, there will be no surprises on the collateral property whatsoever. This step is not necessary although, by doing this your are drastically increasing your chances of a very smooth note sale.
4) Include a high interest rate with the shortest term possible. Meaning, be sure that your borrower can afford the payments at the shortest term shehe can legitimately agree to.
5) Try to keep the loan under a 10-15 year payback date. Anything over 12 years usually takes a much steeper discount then say a 10 balloon. The Note Investor generally likes to be out of an investment in 5-10 years. Ideally, if your borrower situation permits, 5-10 is the first choice.
6) Include a prepayment penalty based on your states regulations and laws.
Please keep in mind; the above information is just a guide. If you have any legal questions about mortgage origination laws in your state, please consult a licensed mortgage brokerbanker (in your state) or an attorney. Always be prepared!
Knowing this info before hand is the difference between a smooth transaction and a complete nightmare! Good Luck!