Home Loans With Bad Credit: The Most Likely Options Open to Bad Credit Borrowers

For any of us with a poor credit rating, the process of buying a new home is believed to be hugely frustrating. Not only is finding a property we like an arduous task, but the likelihood of getting a home loan with bad credit is very slim. The debt is huge, and the risk is,…

For any of us with a poor credit rating, the process of buying a new home is believed to be hugely frustrating. Not only is finding a property we like an arduous task, but the likelihood of getting a home loan with bad credit is very slim. The debt is huge, and the risk is, therefore, perceived to be equally large.

But despite the hurdles that do exist, there are options available to bad credit borrowers who want to own their own home. Securing mortgage approval generally means looking outside the box, and considering the alternative lenders that exist. It can also mean looking to financial aid from government programs.

So what are the alternatives to regular mortgage providers? And more importantly, how can they provide the affordable home loan necessary to buy a property and not lead to extreme financial problems?

Federal Support

The most promising option for any bad credit borrower is a mortgage from the Federal Housing Administration (FHA). This is an organization that has been providing a genuine funding options for those seeking home loans with bad credit for over 80 years, offering terms that make home purchases more affordable.

The advantages that come with securing mortgage approval from the FHA, include lower monthly repayments, a more flexible repayment schedule and a significantly lower down payment – 3.5% of the purchase price, rather than the 5% to 10% that is normally recommended.

However, there are factors to consider too. An FHA home loan is not actually granted by the FHA, but by lenders recognized by the FHA. The terms of the mortgage loan are better because the FHA backs the loan, covering the insurance and dealing with many of the closing costs, thereby lowering the overall debt involved.

Private Mortgage Providers

Because of the need to qualify, not everyone can get a home loan with bad credit from the FHA. For example, bankruptcy and default histories will affect the chances of approval. Also, FHA financing is applicable only to FHA housing, therefore it is not possible to buy any property.

When independence is preferred, then the best move is to approach one of the private mortgage providers. These companies are independent of any bank or large financial institution, which means the terms are better suited to bad credit borrowers. In fact, securing mortgage approval is more likely.

However, while the opportunities of home loan approval are quite good, the interest rates are usually high. It is a disadvantage worth accepting, though, if the need for financing is acute.

Checking Out Alternative Lenders

There are plenty of advantages to getting home loans with bad credit from alternative lenders, but remember there are also real risks in borrowing from unfamiliar mortgage provider. It is hugely important that the reputation of any prospective lender is checked out before committing to a financial contract.

The best way to do this is to check either the Better Business Bureau website, or the Verify1st site, both of which offer information and ratings on the reputation of websites, whatever their sector. Securing mortgage approval is a reason to celebrate, but if the wrong lender is involved, then it can become a financial disaster.

Also, read the small print on the terms and conditions provided by a lender in detail before agreeing any kind of home loan deal. That way, applicants can be sure of terms that are, at the very least, acceptable.

The Seven Major Benefits of Getting Mortgage Pre-Qualification

Applying for a mortgage pre-qualification is the first step in getting a home loan. Basically, you just give a lender or mortgage professional your name, phone number, and some basic information and they will give you a general idea of ​​how much you can borrow. It's simple. Yet the benefits can be very helpful. There…

Applying for a mortgage pre-qualification is the first step in getting a home loan. Basically, you just give a lender or mortgage professional your name, phone number, and some basic information and they will give you a general idea of ​​how much you can borrow. It's simple. Yet the benefits can be very helpful.

There are at least seven major benefits to going through the mortgage pre-qualification process. And the first reason to begin the mortgage pre-qualification route is speed.

It should only take 15 minutes or less to complete a mortgage pre-qualification application. That's it. But if you choose to do the whole loan application first, that could take up to an hour to fill out. And if the lender needs all the documents to make a decision that could take a lot more time. Within a few minutes of completing a mortgage pre-qualification application you can know the basic limit of the mortgage loan amount and the range of the monthly payments.

Benefit number two is the loan amount limit. Mortgage pre-qualification will give you the ball park range of home loan you can receive, therefore helping you target the range of houses to search. This information can save you days and even weeks looking at the wrong type of houses.

Benefit number three is the approximate monthly payment. The advantages of knowing this information can help in many ways. It is definitely nice to know for monthly budgeting purposes. It also can help determine what range of payment would fit into your life style. The standard percentage of housing cost may not be right for your life style. Just because the lender says they will lend up to 45% of your month income you many only want to owe 33% to housing.

I am a firm believer in individual prospect. You know what you want out of life. You are the best judge of what is good for you. Even if a lender will give you more money you many do not want that much debt or monthly obligations. Mortgage pre-qualification gives you the number to make the best plan for your life.

Mortgage pre-qualification gives you another set of numbers. Benefit number four is the ratios. Lenders use the monthly payment on a property to determine a borrower's qualifications. The payment includes principal, interest, property taxes, and insurance-commonly referred to as PITI. This income ratio is based just on the housing cost.

Lenders must also take into account the borrower's long term debts. The total monthly expenses are divided by the borrower's gross monthly income, which results in another ratio, called the over-all ratio. With the two ratios understood, the lender can tell for what loan amount you qualify.

This brings us to benefit number five. Now that the lender or mortgage professional knows the ratios that they can determine what types of loans are available to you. I know it sounds like the alphabet, but each loan type has its own benefits and problems. Mortgages have many types of loans such as VA, FHA, Conventional, USDA, jumbo, Cal Vet and many more. By getting a mortgage pre-qualification you have time to work through the list to choose which is best for you.

This leads to the sixth benefit. Time to get the loan can be very critical. By getting a mortgage pre-qualification early you can work through the loan process with sufficient time. Some people have lost the home that they wanted because the seller could not wait the time it took to get the loan. You can also save money by working with a lender that may have low fees, but take a long time to process the loan.

The last benefit, number seven, may not sound good but it could really help. The mortgage pre-qualification process could tell if you qualify for a mortgage. If the answer is no, you now have time to fix it. Sometimes credit reports show wrong information that can easily be fixed. Other times, there is a major problem that can take months to work out.

Finding this out early is extremely beneficial to you. Time is your friend if it is early in the house searching process. Time will kill a deal if it is near the end of a deal.

Mortgage pre-qualification is fast, almost painless and helpful to you. Even if you are a year away from wanting to move into a new home, start the process now and reap the benefits.

Can I Refinance My Home If I Owe More Than My House Is Worth?

Many homeowners are facing a big problem these days. When they purchased their home, things were good, and the housing market was in better shape than it is today, and their home was priced accordingly. Now though, due to the shaky economy, many homes have actually lost value since they were purchased. This has left…

Many homeowners are facing a big problem these days. When they purchased their home, things were good, and the housing market was in better shape than it is today, and their home was priced accordingly. Now though, due to the shaky economy, many homes have actually lost value since they were purchased. This has left many homeowners, who have been making payments for years, with a home that has dropped in value, and they now owe more on the mortgage than the homes worth. For homeowners who are in this situation, there is help, and yes, mortgage refinancing may be a solution to getting into a better, more affordable, and more appropriate home loan.

Homeowners who owe more than their home is worth are considered underwater. For homeowners in this situation, one of the first things that should do is contact their current mortgage lender or bank. Some lenders and banks have entire departments dedicated to refinancing. They would be able to point a underwater homeowner in the right direction due to having the experience, contacts, and resources to make things happen.

These days, many lenders and banks will attempt to help homeowners by trying to get them a mortgage refinancing through President Obamas HARP (Home affordable refinance program) stimulus. This stimulus plan is actually designed to help homeowners who are underwater and have a mortgage that is extremely backed by either Fannie Mae or Freddie Mac. Most reputable mortgage lenders and banks are using HARP to help homeowners, but some of them do not. The few places that do not although typically offer their own in house offers that are similar. This may not have been true in the past, but these days, with the economy in tough shape and the struggling housing market, lenders and banks are offering mortgage refinancing offers to homeowners who would not be able to get them in the past.

Other options for underwater homeowners include negotiations with their current mortgage lender . While not a full on modification, some homeowners will be able to convince their lender to lower the principal due, or even slightly adjust the home loan interest rates, to help the homeowner get a more affordable monthly payment. This will not always be possible though, and some banks will not even entertain the idea. If an underwater homeowner is able to bring a good amount of cash to the table though, negotiations may go a little easier. The money will be used to pay down a chunk of the home loan, and make it easier for a mortgage lender to work with you.

Some homeowners may be tempted to get a mortgage modification instead of a refinance. However, for a struggling homeowner who is underwater, this is not generally a good idea. A loan modification is just that. It sincerely modifies the current loan to make the monthly payment affordable. There are no true savings to be had, just longer repayment terms, and and more cost in the long run. A mortgage refinancing is replacing the existing loan with a new one that has more favorable interest rates, terms and conditions which will lower the monthly mortgage payment, and save a homeowner money.

Many homeowners are underwater and struggling to find a way to right the ship. With the new Government mortgage stimulus programs, help is now available. Some homeowners will not qualify for a loan refinance, which is a sad, but true fact. For these homeowners, their options will be strictly limited. Homeowners should take action now before their situation gets any worse.

How to Refinance a Home With a Low Credit Score

These days mortgage lenders and banks are offering low interest rate mortgage refinancing options in an attempt to balance out the struggling housing marker. However, many homeowners with low credit scores are afraid of even trying to refinance a home loan due to not believing they will benefit. The truth is, homeowners do not need…

These days mortgage lenders and banks are offering low interest rate mortgage refinancing options in an attempt to balance out the struggling housing marker. However, many homeowners with low credit scores are afraid of even trying to refinance a home loan due to not believing they will benefit. The truth is, homeowners do not need to have a good credit rating to get a money saving refinance. Here is how homeowners get approved for a home loan refinancing with a low credit score.

  1. Gather the Necessary Documents Homeowners should gather and make copies of the needed documents. Get copies of credit card and bank statements, loan statements for your home, car, and any others you may have. Homeowners who have these documents ready to go are more likely to be taken seriously by a potential mortgage lender or bank. They can also be used to provide proof that a homeowner is breaking their financial habits that caused their credit rating to lower. While this may not guarantee anything, it will certainly help. It will also make the lender or bank take less time on paperwork and provide them more time to work on finding an appropriate refinancing term.
  2. Comparison Shop Homeowners are encouraged to call not only their current mortgage lender or bank, but also competitive ones. Different lenders and banks have different costs, and interest rates, especially when dealing with homeowners who have bad credit. Some companies have whole departments set up just for dealing with bad credit mortgage refinancing. Others, do not yet still deal with it on a daily basis. The benefits of comparison shopping mortgage refinancing offers is to ensure that the best possible loan, and lender, are being used.
  3. Explain the Past and Plan for the Future There will come a point in the mortgage refinance process that a homeowner has a chance to explain why their credit rating is in bad shape, what they have been doing to fix it, and what they plan on doing should the mortgage refinancing get approved. For example, if you had medical bills, or were unemployed, and have since taken care of the issue, the lender or bank has more reason to believe you will be able to maintain the monthly payments post refinance. If you have bad credit due to non payment, start paying off debts monthly. Even paying the minimum amount due is sufficient, as long as the payments are on time and consistent. With proof to back it up, the longer repairs have been made, the better chance at getting approved for a home loan refinance.

For homeowners with a credit score under 620, it will be a little bit trickier to find a mortgage lender or bank that you are worth of taking a risk on. Some homeowners will be limited in the amount of the loan, or the interest rates that they are able to get due to a lower credit rating. It is certainly not impossible though. With a little work and due diligence, it will happen. Even with the possibility of added expenses, mortgage refinancing the proper way will still benefit homeowners and enable them to save money on their monthly home loan payment.

The Main Advantages of Refinancing Your Home

Many people are hearing about refinancing their home loan these days. Whatever it is at their bank, on a television ad, or maybe they have overheard others talking about it. Either way, refinancing a home mortgage now is a very popular option for many homeowners due to favorable interest rates and a recovering housing market.…

Many people are hearing about refinancing their home loan these days. Whatever it is at their bank, on a television ad, or maybe they have overheard others talking about it. Either way, refinancing a home mortgage now is a very popular option for many homeowners due to favorable interest rates and a recovering housing market. Many homeowners though do not understand mortgage refinance or the advantages it can provide. Here are some of the most popular reasons to refinance.

Lower the Monthly Loan Payment

Many homeowners have loans with higher interest rates than what is available now. Some homeowners, especially those who bought in the housing “boom”, got into an ARM (adjustable rate mortgage) loan and have seen the low initial interest rates go up. Refinancing so that the monthly mortgage payment amount is lowered is by far the most popular reason homeowners take action. While closing costs and fees can add up, getting a lower interest rate will usually outweigh these costs. If a homeowner is able to reduce their interest rates by even 1%, a mortgage refinance may benefit them and slash their home loan payments.

Get a Different Loan Type

A lot of homeowners are in a situation where changing the type of loan they have may save them money. Typically, homeowners want to get out of an ARM and into a more stable fixed rate mortgage. A lot of ARM loans had low interest rates to start, but have increased over time, which is the nature of the type of loan. Most of them now have higher interest rates than what is available from a standard type fixed rate mortgage. Homeowners who are planning in staying in their home for awhile will usually benefit from getting out of an ARM and into a more traditional fixed loan. However, for homeowners who are planning on moving or selling their home in the next few years may benefit from doing the opposite and getting into an ARM. A lot of ARM loans offer lower closing costs, and low initial interest rates. Many times, these rates do not change for the first few years, than they begin to adjust. If a homeowner is able to get out of their home before the interest rates increase, they may save them a lot of money.

Get Cash Back from the Homes Equity

They are some homeowners who have, over the years, built up equity in their home and want to use it to their advantage. This is where a cash back mortgage refinancing comes in. Using this method, homeowners are able to, for example, refinance a loan for $ 50,000, that they owe $ 20,000 on, and would pocket the $ 30,000 difference. Typically, these loans are cheaper than loans from banks and personal loans. Some homeowners use this money for a remodel that further increases their homes worth, while others use it to make big purchases or pay down other bills. Be careful though. This type of loan can easily cause long term financial problem if it is not thought through.

Pay Off the Loan Quicker

Some homeowners are fortunately enough to have gotten themselves into a better financial situation since they purchased their home. Whether through a lucky windfall, more disposable income, or a larger salary, some homeowners may want to pay off their biggest debt, as soon as possible. Typically, a homeowner will refinance into a mortgage that allows them to pay off their mortgage sooner, sometimes shaving 10 or 15 years off the loans repayment length. The monthly payments are usually higher, but the overall savings are massive. This method also allows the homeowner to build equity in their house sooner should they need it in the future.

Mortgage refinancing is not going to be a solution for everyone, but for a lot of people, it will provide many advantages to their current loan, and will save them money. Each person has a unique set of goals, and financial situation that will make certain home loan refinance options more beneficial than others.

Questions to Ask When Refinancing Your Mortgage

As interest rates get lower and homeowners look for a way to save money, mortgage refinancing becomes a real possibility. However, different financial situations and goals will dictate which direction a homeowner should take when getting a home loan refinance, or if they should get one at all. Here are some questions a homeowner should…

As interest rates get lower and homeowners look for a way to save money, mortgage refinancing becomes a real possibility. However, different financial situations and goals will dictate which direction a homeowner should take when getting a home loan refinance, or if they should get one at all. Here are some questions a homeowner should ask when getting a home mortgage refinancing.

  1. What is your financial situation and what are your goals?

    Has your credit gotten worse since you bought your home? Did the value of your home actually decrease due to a bad housing market? Do you make more income than you initially got your home loan? Are you interested in lowering the monthly payments, or trying to pay off the mortgage sooner? These are some of the questions that homeowners need to ask themselves before they do anything. The answers to these questions will help narrow down the options and help ensure that the homeowner makes the best decision possible.

  2. Would you have to purchase private mortgage insurance?

    Homeowners who want to get cash out of the refinancing from their homes equity, or people who have seen their home lose value, may need to purchase PMI (Private Mortgage Insurance). Typically this is needed when a homes loan to value ratio is 80% or more and will add to the costs of home loan refinancing.

  3. What are the terms of the new loan?

    Are the interest rates available now better than the rates you have now? While there is more home loan refinancing than interest rates alone, they are a major factor in determining if it is the right decision to make. Also, be sure to understand the terms of the loan. How long will it take to pay off? Is there a balloon payment? Is it an adjusted rate mortgage (ARM) or a fixed rate mortgage?

  4. What are the costs and fees?

    Whenever you refinance a mortgage, their will be costs. The places that claim to be low or no cost make the difference up in points on the home loan or the overall interest rates. Lawyer fees, document fees, and other closing costs can cost up to 2% of the loans total value. While these fees can typically be taken by a proper refinancing, they may make it not worth it for some people.

While these are not all the questions that may need to be asked, it is a very good start for any homeowner who is looking into getting a mortgage refinancing. With home loan interest rates as low as they are now, many people can save a lot of money if they take advantage and properly refinance. It may not be a good decision for all, and it might not cure someones financial problems, it is a good start to save money on the most expensive monthly bill that most people have.

The Costs Involved With Refinancing Your Home

Mortgage refinancing costs and fees will be different depending on the homeowners financial situation and the type of loan they want. With interest rates so low right now, many homeowners can benefit from getting a mortgage refinanced into a new loan with better interest rates, terms, or conditions. However, getting a home loan refinancing does…

Mortgage refinancing costs and fees will be different depending on the homeowners financial situation and the type of loan they want. With interest rates so low right now, many homeowners can benefit from getting a mortgage refinanced into a new loan with better interest rates, terms, or conditions. However, getting a home loan refinancing does cost money. Sometimes, the costs can overwhelm the savings, and make a refinance pointless. Here are some common costs that are involved with a typical mortgage refinancing.

Mortgage Lender or Bank Fees

There will be a fee charged by the mortgage lender or bank to facilitate the loan. These fees are for document preparation, administrative costs, processing, and loan underwriting. Almost ever lender and bank charge these fees, so they are not unusual. These fees can cost as much as $ 900, sometimes more. The places that advertise “no cost” mortgage refinancing may not charge these fees, but they will come at a price somewhere through the process. Typically in the form of higher interest rates, or other “costs” that they claim to have no control of.

Home Appraisal

When refinancing a mortgage a homeowner will generally need to pay for an appraiser to inspect the home. These appraisals are required by most banks or lenders in order to ensure that they are not financing a worthless property should things go wrong. If your home does not have a recent assessment, especially in a turbulent housing market, a recent one will be required. This can cost upwards of $ 400 for a typical single family home. Sometimes, investment property appraisals can cost a little more and also require a operating income statement.

Title and Escrow Fees

These costs are to ensure that the owner of said property, is truly the owner. Not some middleman, tenant, or con artist. Many times a mortgage is owned by not who you pay money to, but their parent company or similar. Sometimes, the true owner of the home loan is buried behind several different corporation names. The title fee covers that aspect, and ensures all parties involved are honest and aware. The escrow fee is simply the cost of having a third, uninvolved party oversee the process to ensure someones interests do not cause dishonesty. Their also may be express mailing and courier fees involved with this as documents get passed along in a timely fashion to all involved parties.

These are the most common costs associated with a home loan refinance. The costs of mortgage refinancing will be different amount depending on factors that include credit worthiness, home value, loan amount, interest rates, and the lender or bank that is used. Generally, the worse the credit rating is, the more expensive the process becomes as lenders need to do more work to find an appropriate deal that will be accepted by a bank. While these costs may be too much for some people, in general, they can be welcomed by the savings on a proper mortgage refinancing. The best thing homeowners can do to ensure they pay the least amount possible is shop around and compare costs from a number of different lenders and banks.

Refinancing Your Mortgage – How Long Before I Can Refinance As a New Buyer?

Most people who live in a home, have a mortgage. This is also, typically, the most expensive monthly expense people have. That is why so many homeowners are interested to know how soon after buying a home they can refinance their mortgage. Here are some things homeowners should know about how long it takes before…

Most people who live in a home, have a mortgage. This is also, typically, the most expensive monthly expense people have. That is why so many homeowners are interested to know how soon after buying a home they can refinance their mortgage. Here are some things homeowners should know about how long it takes before a home loan can be refinanced.

Refinancing a home loan is pretty simple when you break it down. It is just taking out one loan, preferably with better terms, rates, conditions, or all three, and paying off the existing one with it. The goal of refinancing is to meet the current loan while getting into a new one that will save the homeowner money, lower their monthly payment amount, or both.

Technically, a homeowner can refinance a mortgage anytime they desire so long as they are able to find a mortgage lender or bank that wants to work with them. However, with costs, fees, and sometimes a prepayment penalty, refinancing too often is not often a good idea. Many homeowners got into their mortgage when times were better, and interest rates were higher. Some people even got into ARM loans that were low at the time, but have had the rates go up. A lot of homeowners purchased their home and have had their credit rating improved since then, which would vastly improve their loan options, and interest rates.

When getting a mortgage refinance though, their are always costs to consider. Often, mortgages contain prepayment fees. The prepayment fee is exactly what it sounds like. A fee for paying off the loan early. These were especially popular during the housing boom due to lenders and banks wanting to ensure that if things go south on the loan, they would be able to recover some money down the line from the next buyer. Other costs also exist when refinancing a home loan. Many such as, document fees, closing costs, points, and other expenses have the potential to quickly swallow up any savings to be had through refinancing. These are things to consider, especially for homeowners who recently got into their loan and are looking to refinance.

Typically, homeowners will only want to refinance when they are able to get a more favorable loan, that overcomes the associated costs, that meets their financial goals. Whether that is a week after closing on a mortgage, or 10 years, each situation is unique depending on the needs and wants of the homeowner. Most of the time though, significant changes in income, credit rating, home value, or interest rates are the only beneficial time for a homeowner to consider a mortgage refinancing.

When Do You Need a Second Mortgage?

There are several occasions that would prompt us to avail of a loan. In some instances, a person may even need two or more loans. When a loan is availed and the collateral is real estate, this is called a mortgage. If the person further requires refinancing and uses the same property to procure another…

There are several occasions that would prompt us to avail of a loan. In some instances, a person may even need two or more loans. When a loan is availed and the collateral is real estate, this is called a mortgage. If the person further requires refinancing and uses the same property to procure another loan, this is called a second mortgage.

A second mortgage usually incurs a higher interest rate. This is because when you are not able to pay, the first lender is paid first. The secondary lenders are only paid once the first is fully reimbursed.

It is also possible to have a second mortgage with a variable rate. The lender is given the liberty to do periodic interest rate adjustments. However, the value should still fall within a range that has been previously agreed upon. Make sure the upper and lower limits of the adjustable rate are clearly stamped in the contract.

Not everyone is advised to obtain more than one loan. This is because not everyone is qualified and able to repay several loans at once. Here are some of the things you should consider and need to have if you plan to take up a second mortgage.

First, your first mortgage should have significant equity. This can mean one of either two things. The first is that you are consistently paying the first mortgage. Your equity increases as you keep on paying off any debts in the name of the property.

The other meaning is that your property is valued very much in the market. This usually occurs if your property is located in a good area. This includes close proximity to highways, malls, churches and many more. Likewise, a low crime rate in the neighborhood also contributes slightly to this.

The second consideration is that your debt-to-income ratio is very low. If this ratio is high, you can still try to apply for one but it might take some time before it gets approved. This is because the lender will need to perform background checks in order to find out if you indected elsewhere.

A delay in the approval of the second mortgage is the least of your worries. At most, they are free to deny you a loan if your credentials are not sufficient. That is why it is best to apply only when your income significantly exceeds your debt.

Third, you need a stable job. Lenders will usually require your proof of employment and proof of salary. These documents can be easily procured from your employer. The lenders need this in order to judge whether you are capable of paying off the loan. Sometimes this will also decide the amount that you can avail of.

When do you avail of a second mortgage? It is entirely up to you. An urgent need for a big amount usually triggers people to do so. Some people borrow a huge sum in order to invest it in the property itself. They do this to improve its value so that it can be sold at a higher price in the future.

How to Use the Home Affordable Mortgage Refinance Program (HARP)

Millions of homeowners, in all types of financial situations, are now eligible to get a money saving mortgage refinancing thanks to the HARP stimulus plan. HARP (Home Affordable Refinance Program) allows homeowners who are upside down on their home loan to get a mortgage refinance that will lower their monthly payments, prevent a foreclosure, or…

Millions of homeowners, in all types of financial situations, are now eligible to get a money saving mortgage refinancing thanks to the HARP stimulus plan. HARP (Home Affordable Refinance Program) allows homeowners who are upside down on their home loan to get a mortgage refinance that will lower their monthly payments, prevent a foreclosure, or both. Here are some eligibility details and other information homeowners should be aware of if they want to take advantage of these new Government programs.

Many responsible homeowners have been feeling the negative effects of the bad housing market, and are almost being punished for it. However, thanks to HARP, help is now available for the many homeowners who have been making their payments but have seen their home value decline. These homeowners are considered upside down on their mortgage because they owe more than their home is worth, even with years of payments being made. In the past, it was very difficult, if not impossible to get a mortgage refinancing. Now though, things have changed, and major mortgage lenders and banks are offering new home loan options to nearly any homeowner. Even homeowners with upside down loans or other financial situations.

HARP is designed to help homeowners who are unable to get a traditional mortgage refinancing. The goals of this program are to provide responsible homeowners a chance to get into a better, more stable, and more affordable, monthly mortgage payment. Just like every loan and refinance though, the typical closing costs and associated fees will still apply. The savings to be had though from the low home interest rates available now, and through the stimulus program, will significantly offset the costs in most cases.

Basic eligibility requirements for HARP include:

-A home loan that has been paid in full, and on time, for the past 12 consecutive months.

-A LTV (Loan to value) ratio that is 80% or more.

-A home loan that is currently owned or backed by either Fannie Mae or Freddie Mac

– The mortgage must have been closed on and finalized on or before May 31, 2009.

-That the home loan has not been refinanced in the past 3 years.

It may seem like a tough thing to qualify for, but in reality, it is not. Fannie Mae and Freddie Mac are the two largest mortgage providers in the country. Even if your payment is made to a third party, odds are that one of those two companies very own your home loan. Also, 12 on time payments, out of a typical 360, is not that hard to accomplish. The largest benefit that HARP provides is for homeowners who are underwater on their current mortgage and would not be able to get a home loan refinancing otherwise.

Once a homeowner has established their eligibility for HARP, it is up to them to do some basic homework. This will include contacting your current lender, and others, to see if they participate in HARP and what options exist for you. It is crucial to contact a variety of different banks and lenders to ensure that you are getting the best, and most cost effective, mortgage refinancing possible. Many times, fees, available interest rates, and even loan types differ from place to place and the only way to discover this is to contact them yourself.

While the process may seem intimidating, it is actually pretty straight forward after these basic steps are taken. Many homeowners are associated to get a mortgage refinancing due to how complex it can seem. That is why there are mortgage lenders and banks who have the experience, knowledge, and resources, to help. That is also what part of the closing costs and fees are for. While it may not be right for everyone, many people will save a lot of money through using HARP for themselves. Contact your lender or bank today to see how you can benefit.

Home Loan Mortgages With Bad Credit: Lowering Costs For An Affordable Deal

It is assumed by almost everyone that getting a home loan mortgage with bad credit is very difficult. In fact, with a poor financial status, the chances of getting the green light are extremely low. It is not just the nerves of the lender, but the fact the interest rate is typically too high and…

It is assumed by almost everyone that getting a home loan mortgage with bad credit is very difficult. In fact, with a poor financial status, the chances of getting the green light are extremely low. It is not just the nerves of the lender, but the fact the interest rate is typically too high and the repayments may be too great.

But it is possible to get mortgage approval regularly low credit scores. For a start, the scores matter very little in any loan application, affecting the interest rates charged rather than the actual approval decision. Even income has less say over the process than many believe.

As with any loan deal, affording the repayments is the key consideration, and so convincing the mortgage provider that the home loan can be repaid in comfort is the purpose of the application. There are 3 excellent ways in which to help things along.

1. Employment and Income

Other than the basic criteria associated with any loan, obtaining a home loan mortgage with bad credit is dependent on a few extra details. One of them is the employment status of the applicable, and the other is the income that is being earned.

Being in full-time employment is essential, especially when trying to secure mortgage approval low credit scores. However, there is also a need to have held the job for at least 6 months before the application is submitted. Some lenders stipulate longer terms.

This means a short or mid-term contract (1-5 years) is not enough to convince a lender to grant a home loan. Even if the contracted job is extremely well paid, there is no guarantee since large incomes are not enough unless the debt-to-income ratio is well below 40%.

2. Offer a Larger Down Payment

The significance of the down payment is such that a larger sum paid can swing an application for a home loan mortgage with bad credit. Basically, because it chips a large chunk off the required mortgage sum, the larger it is the more affordable the mortgage will be.

The mortgage lender is only worried about getting their money back, and often the difference between an affordable monthly repayment and an expensive one is $ 100 or $ 200. Normally, the down payment is 10% of the purchase price, but if it were 20%, then obtaining mortgage approval consistently low credit scores becomes likely.

Of course, getting the larger down payment together is the trick. A $ 200,000 home will require a $ 20,000 payment at least, with the large sum being $ 40,000 – a sizable sum in any case. Still, the extra effort can be justified by the home loan deal.

3. Move to Lower Your Interest

The main problem with applying for a home loan mortgage with bad credit is not the sum to be borrowed, but the size of the repayments. Lowering them as much as possible is a key factor in winning over the mortgage provider.

While a larger down payment helps greatly in doing this, the interest rate charged can have a significant influence too. Lowering the rate does help make things more affordable, and improving your credit score helps to accomplish this. Clearing some (if not all) existing debts is the best way, which means a consolidation loan may be needed in advance to pay off those debts. Once this is done, the credit score increases and debt-to-income ratio improves, entitling the applicant to a lower interest rate.

Remember, securing mortgage approval regularly low credit scores comes down to convincing the lender the home loan will be repaid. Once that is achieved, there is little reason to deny approval.

How to Become a Mortgage Broker?

Mortgage brokers find the best buyer for the lenders and search the best lenders for the buyers from the buyer's perspective, so acting as a bridge between the two parties and remaining an important part to the entire processes over. They have the knowledge, expertise, experience and expanding network to fulfill the demand of the…

Mortgage brokers find the best buyer for the lenders and search the best lenders for the buyers from the buyer's perspective, so acting as a bridge between the two parties and remaining an important part to the entire processes over. They have the knowledge, expertise, experience and expanding network to fulfill the demand of the customers. There are training centers to provide satisfactory training to enhance the capacities of a company. This is due to the fact that mortgage business is a growing one; the training schools have come into existence. The brokers who have completed training are given a license, which is an authorized tag and gives recognition and make them more reliable than those without license. They train the mortgage brokers on how to provide the most cost effective methods of obtaining the finance that is needed for the customer.

The process of becoming a mortgage broker is not necessarily a difficult one; however, many people get discouraged along the way because they are not aware of the shortcuts that are available to them. If you want to know how to become a mortgage broker and not lose your mind, here are a few simple steps to help guide you along the way. The minimum requirement to become mortgage is to have a Certification IV in financial services. You will become a member of an industry association MFAA or FBAA.

The basic function of this industry is to provide consultancy services to the customers and guide which interest rate and loan lender will be best suited to the customers. They are also required to help the customers in fulfilling the documents needed. They assist the customers in completing the lending process. In fact, mortgage brokers increase the sales of the companies since they act as mediators between the buyer and the seller.

First of all, you should be aware of the basic process and rules of the industry. Many states also have requirements regarding criminal history that exclude felons and people that have been convicted of crimes of moral turpitude. The work undertaken by a mortgage broker depends on the depth of the services and liabilities. Authority also required the assessing the credit history and affordability of the customer. Mortgage broker has to gather all the necessary documents like pay slips, bank statements etc., explaining the legal disclosures and submitting all the materials to the lender.

The biggest mistake people make in trying to make career by studying and taking the exam on their own. While you may not be able to have someone in there to help with the exam, you can certainly get help in preparing for it. There are several professional training and courses providers and study classes you can take that will cover the material on the test, answer any questions you have, and provide sample tests. These study courses are invaluable when it comes to preparing for and passing the test. An ideal mortgage broker usually requests for the entire financial situation of the clients including future plans and explains all the documents of the loan communicates through the loan process in a timely manner and negotiate with the lenders to achieve the best deal.

Getting Home Loan Online With Bad Credit: What Lenders Are Looking For

For many people seeking a new home, the idea of ​​getting their mortgage online seems a little strange. But there are several reasons why it makes sense to seek a home loan online, with bad credit scores ignored being one of the largest. As with all loans, there are clear criteria to meet before there…

For many people seeking a new home, the idea of ​​getting their mortgage online seems a little strange. But there are several reasons why it makes sense to seek a home loan online, with bad credit scores ignored being one of the largest.

As with all loans, there are clear criteria to meet before there can be any hope of securing mortgage approval online. But because everything over the Internet is faster, and online lenders specialize in bad credit lending, there can be greater confidence in getting a better deal.

When it comes to applying for these home loans online, there are three key areas that every applicable should know is of special interest to lenders. They include the size of the down payment, whether bad credit has been improved, and the employment status of the applicable.

The Down Payment

The down payment is a far more significant part of the application process than many people think, especially when applying for a home loan online with bad credit. From the point of view of the lender, bad credit always adds to the risk factor. But if the payment is large, then the level of risk is lowered.

For example, with a normal 10% down payment on a $ 100,000 house, only $ 10,000 is made with a $ 90,000 mortgage required to complete the purchase. But if a larger payment of 20% were made, then the required mortgage falls to $ 80,000. With a lower sum borrowed, the potential loss for the lender is lower too.

It is the same principal whether seeking mortgage approval online or from more traditional mortgage providers. And since saving such large cash sums requires real financial discipline, it is highly regarded by lenders, increasing the chances of getting the home loan greatly.

Signs of Credit Score Improvement

Low credit scores definitely are a hindrance when applying for large loans, but most mortgage lenders are open-minded over the circumstance that lead to the score. And they are very receptive to applicants who have made a concerted effort to improve their poor scores. This is a huge benefit when applying for a home loan online with bad credit.

Signs of improvement give a very clear indication of just how committed the applicant is to securing the mortgage. It usually means some careful planning is needed well in advance to make any real impact on the score. This degree of forethought can certainly help when seeking mortgage approval online.

The best way to improve your score is to take out a single consolidation loan, and buy out all of the existing debts. It can mean freeing up a lot of extra funds to commit to the home loan repayments. By lowering the interest charged on a mortgage, real savings are made. Just $ 100 saved each month adds up to $ 36,000 over 30 years.

Having A Reliable Employment Status

Having a large income is no guarantee that an application will be approved. Mortgage providers want to know the source of the income is reliable, and that long-term employment is secured. When seeking a home loan online with bad credit, providing the ability to repay over the full term of the mortgage is essential.

This kind of security can not be provided by a high-paying short-term contract job, so the size of your income matters little. And as tempting as it might be to believe that mortgage approval online is easy to get, job security still needs to be proven.

Also, remember that the debt-to-income ratio all mortgage providers go by limits the share of excess income for loan repayments to 40%, so home loan repayments must be within that range if approval is to be secured.

Get The Lowest Interest Rate on Your Home Mortgage Refinance

When you look to refinance your mortgage you are likely doing so for one of three reasons: To get cash out for an important project, to refinance out of a variable rate into a fixed rate, or to lower your interest rate. When rates are particularly low, the latter reason, getting a lower rate through…

When you look to refinance your mortgage you are likely doing so for one of three reasons: To get cash out for an important project, to refinance out of a variable rate into a fixed rate, or to lower your interest rate. When rates are particularly low, the latter reason, getting a lower rate through refinancing, is by far the most common reason. We want to provide anyone looking to lower their home mortgage interest rate advice about how to get the lowest possible rate:

1. You will not be able to fix a low credit score fast enough to get a low rate, so start fixing it right now. You need to research exactly what goes into your credit score, and know that keeping it high falls into two categories: Making sure you pay at least the minimum on all bills, and knowing exactly how much credit you should have out and in what forms. The latter is not as complicated as it sounds – you need to know how many credit cards you will ideally have open for example. In addition to those ongoing steps, get a copy of your credit scores from all three agencies and make sure there are no mistakes that are lowering your score.

2. If you are likely to need or want your spouse or partner to be on the mortgage loan, make sure you are taking the exact same steps with him or her as as keeping their credit score as high as possible.

3. If you have the ability to put a little cash in to lower the percentage of your home's value that you are refinancing, run that possibility by your mortgage broker. In some case, for example, being able to only refinance 70% of your home's value as opposed to 80% may get you a lower rate.

4. Carefully assess whether you can make the payments on a borrower term mortgage than you currently have, and then see whether your mortgage broker or bank will give you a lower interest rate on a shorter term than you have now.

6. Assess whether a “float” is worthwhile. A float is when, during the period after you lock but before you close you can re-lock at a lower interest rate if rates fall. Be careful though and ask questions – some floats come with either a direct cost or a cost as far as the initial interest rate. It may not be worth it if this is the case. All things being equal equal, the offer of a completely free float can be the difference maker in your choice of mortgage broker.

7. “Buy downs” may be worthwhile for the homeowner who is planning to live in the home for many years. Your broker may allow you to pay higher fees or points at closing in order to get a lower rate. The simple way to figure out whether a buy down is for you is to do the math as far as your savings with the new rate times the number of years before you sell, versus the cost of the buy down. Keep in mind that if it is very close the buy down may not be worth it because you are giving up money that could be otherwise used or saved with interest.

This may not be a comprehensive list of how to get the lowest interest rate on your home mortgage, but it is certainly some of the major ways. Best of luck as you pursue the lowest possible rate on your refinance!

Home Loans With Bad Credit: Alternative Options For Better Approval Chances

Getting the funds needed to buy a home is not easy for those of use with bad credit histories. Traditional mortgage providers either avoid the risk, or charge high interest rates in compensation for accepting it, making such deals very expensive. But there are other options to consider when seeking a home loan with bad…

Getting the funds needed to buy a home is not easy for those of use with bad credit histories. Traditional mortgage providers either avoid the risk, or charge high interest rates in compensation for accepting it, making such deals very expensive. But there are other options to consider when seeking a home loan with bad credit.

The decision to buy a home is a major one, not just because of the amount of money involved but because it requires a lifetime commitment to repay the debt. Carefully considering the options, and the ramifications of each, is essential. Securing mortgage approval with poor terms can prove a very cost investment.

But what are the alternative home loan options available to bad credit borrowers? Well, for those of us in very poor financial situations, the best two options are securing federal funded mortgages or privately funded mortgages.

Federal Funded Mortgages

Perhaps the biggest help to bad credit borrowers in their search for home purchase funding has been the Federal Housing Administration (FHA). Set up over 80 years ago, its purpose has been to ensure applicants for home loans with bad credit still have a chance to secure approval.

The mortgages available through the FHA program are structured to allow for a greater range of imports, and are very useful to first-time home buyers. Securing mortgage approval is made easier because, on the back of FHA subsidization, mortgage providers ignore the credit history of the applicant.

This effectively means that income is the sole basis of approval, so all an applicable needs to do is prove that the home loan is affordable. Qualifying for FHA subsidizing is based on their assessment of credit status, income and circumstance.

Private Lender Mortgages

The alternative to an FHA mortgage is a private lender mortgage, which is provided by individuals willing to effectively bankroll the purchase of an FHA property. Securing a home loan with bad credit is simplified because it is easier to strike a deal with an individual than with a financial institution with a strict lending policy.

These lenders are generally to be found online, and they are willing to work on agreeing a deal around your own circumstances. Perhaps the mortgage term will be longer, or a mixture of repayment schedules and terms can be agreed. This greater flexibility makes securing mortgage approval much more likely.

Of course, if negotiating a home loan with a private lender, it is essential that their reputations are checked out. Never try to deal with an unknown lender online, as the pitfalls can be too severe. So, check out either the Better Business Bureau or Verify1st websites to make sure they are trustworthy.

Other Options

Of course, there are other options to securing a home loan with bad credit than the two mentioned above. The most plausible source is an independent mortgage broker. These are not mortgage providers, but have a network of contacts that they use to find the best mortgage option on your behalf.

The major plus of this option is that mortgage providers are contacted, and those interested in lending the funds will make an offer. So, effectively securing mortgage approval is guaranteed. But, the terms offered are usually quite poor with high interest rates.

This is why it should be the last port of call for anyone seeking a home loan. A good broker will be able to find at least competitive terms, but it is fact that approval is so certain that is the major attraction.