Buy a home with bad credit

Owning a home is the ultimate American dream. It is also the best way to build wealth for yourself and for future generations. Having bad credit should not prevent you from owning a piece of the American dream.
If you have poor credit - you are not alone. It is estimated that approximately 30 million Americans struggle with bad credit from having excessive credit card debt and not paying their bills on time. Unfortunately, rising medical costs, job layoffs, ridiculous gas prices and escalating home prices are exacerbating the rate at which Americans are falling into the bad credit pit.

Without a doubt, no other process renders you more ashamed and more aware of your bad credit score than the act of purchasing a home. Buying a house with good credit is horrendous enough, for first time homebuyers. For people with bad credit, it is an act of congress but it need not be. Here are four easy ways to buy a house with bad credit.

Keep it in the family. Get a relative who has good credit to purchase the house on your behalf. A family member with a solid credit history, will get a good interest rate thereby making your monthly mortgage payments more affordable. You will also get some exposure to the home buying process without being overwhelmed.

After your relative closes on the house, you must take over the mortgage payments, insurance and taxes. This will ensure that you get the tax benefits of being a home owner right away. Arrange for your relative to sign a “Grant Deed,” to add your name to the title of the property. This makes you a co-owner of the house.

At this point, you should focus on rebuilding your credit score to between the 675 to 715 range – the higher, the better but you can make this your initial goal. To improve your score, you must live by these three rules: · Pay your bills on time – always. · Do not open up too many lines of credit. Keep one or two lines of credit. · Do not max out your credit cards.

Once you have achieved a good credit score, your relative can sign another “Grant Deed” to take their name of the property title – making you the full owner of the house.

Self Serve. If you do not have a family member or friend, who can buy the house on your behalf, then you will have to buy the house on your own. You will need the services of an experienced mortgage broker. A good mortgage broker has access to a variety of mortgage programs and can find one that fits you. Since you have bad credit, you will get a not-so-great interest rate. This is to be expected.

According to the Fair Issacs Corporation (FICO), if you have a FICO Score of 550, your likely interest today would be 9.289%, while a person with a FICO Score of 700 would get an interest rate of 5.867%. On a $200,000 mortgage, the difference in monthly mortgage payments would be $426.00. This is a lot of money, but do not obsess over it. The lesson from this exercise, is to realize the importance of improving your credit score. Once you raise your credit score, you can refinance the mortgage to get a lower interest rate thereby reducing your mortgage payments.

Rent to Own. You have seen the advertisements in the newspaper. If you are a renter and can afford monthly mortgage payments but do not have the 10% to 20% down payment required to buy a home – this is a great option. “Rent-to-own,” legally referred to as “Lease Option” works as follows: · Buyer finds a home. · Buyer and seller agree on a sales price (for example $250,000) · Buyer pays seller a non-refundable option fee. This fee is the price that the buyer pay the seller for granting them the option to buy the house. · Buyer and seller agree on interest rate, option term and down payment. For example, the terms of the contract may be 8%, 24 months and a down payment of $2,500. The buyer does not to pay the $2,500 in one lump sum but rather over the period of 24 months.

Total monthly payments to the seller will be the principle and interest on a $250,000 mortgage loan at 8%, which is $1,834 (assuming 30 year fixed) plus $104.17 ($2,500/24 months) for a total of $1,938.17. At the end of the 24 months, you have the option to purchase the house or pass up the deal.

The biggest advantage to the “Rent to Own” process, is your ability to lock-in a price today for a future home purchase. In other words, if the house is worth $260,000 in 24 months – you immediately have $10,000 equity in the home.

Seller Financing. Get the seller to finance your home purchase. Bypass the hassle of getting a conventional loan and find a motivated seller, who is willing to finance your home. The way to do this, is through a “wraparound mortgage,” legally termed an “Inclusive Trust Deed”. In a wraparound mortgage, you purchase a house by assuming a subordinate mortgage to the original mortgage on the house.

This scenario works as follows: · Buyer finds a home. · Seller is currently carrying a mortgage on the house, in the amount of $200,000 at a 7% interest rate. · Buyer and seller agree on a new sales price, interest rate and down payment (for example $250,000, 8.5%, $25,000). · Buyer puts down $25,000 as down payment and assumes a loan for $250,000 at 8.5%. Buyer makes payments to the seller on monthly basis. · Seller pays original loan mortgager on a monthly basis and pockets difference.

This option negates the arduous process of finding a conventional loan. In addition, you avoid closing costs, which can be quite steep in some states (up to 5% of the sales price).

Any of these four options will lead you down the path of home ownership. Buying a home with bad credit is an attainable goal.

The author is the owner of the information-rich website www.poorcreditgenie.com. The website offers free advice on how to rebuild credit and manage debt. The site also features numerous articles and news stories on credit report, credit cards and bankruptcy.

By DELIA GALLEY

Home Equity Loan - Advantages and Disadvantages

A discussion of the benefits and drawbacks of acquiring a home equity loan is important to enable you to make an educated decision about the validity of obtaining the loan.
A loan taken out for the purpose of transforming the equity in your house into cash that can be used for other purposes is known as a home equity loan. A loan taken with the equity in your home as collateral can be structured in many ways. It is actually a second mortgage in many ways, and will result in less of your home's value being accessible should you decide to sell the property. It is an excellent way to obtain access to a sizable amount of cash, depending on the amount you owe on your home and the market value of your home. The difference is your home equity.

Advantages

Most borrowers determine that the home equity loan works to their advantage.

Single Payment

Using a loan against the equity in your home as opposed to trying to take out a combination of personal loans and increased credit card debt means that you will only have one payment monthly for the loan rather than a half dozen or dozen small ones. The home equity loan as a single unit is probably going to be easier to obtain than numerous smaller loans all at the same time. You only need remember the due date and amount on one loan and thus you can prepare for and budget well into the future.

Available Cash

When you take out an equity loan on your home, it usually results in a larger amount of cash available to you all at once. No matter what the reason for the lump sum cash is, having it in one sum often serves as a way to give you a clean start from financial problems that are eating away at your financial freedom and at your sanity.

Disadvantages

It is important that you not lose sight of the disadvantages of the loan against home equity.

Increased debt

When you obtain a home equity loan, even if it is to pay off other debt, you will almost always increase the total amount of debt that you owe. You should study carefully whether the increased debt is offset by the advantages that a single payment--possibly smaller in size is worth going even further into debt. If your goal is to change the ability of your family to meet future obligations or to add to the debt load as an investment toward the future, such as paying for a college education for yourself or your family, the debt load may be justifiable.

Economy of the area

Before taking out a home equity loan, it is important to look realistically at the area's economy. If housing prices in the community or in your neighborhood are beginning to fall, obtaining an equity loan to improve your home so that you can sell it and move on may not be a good idea. You may find that the increased asking price necessary to clear the loans on your house will mean no buyers will be able to qualify to purchase your house.
by Alan Lim

School Consolidation Loan And Consider The Factors

A college education is a huge expense in America today, and one taken on multiple times by most families. Even with federal grants and loans, it can be difficult to pay for school for even one child. Consider a consolidate debt loans? There are many loan programs out there to help you pave the way for your children to get the education they need for successful careers. Unfortunately, most of these programs and loans require that repayment begins within six months of graduation or leaving the school. This throws a tremendous debt into play that most people cannot afford, especially when there are multiple loans from multiple lenders. Thankfully, you can ease the burden by getting a school consolidation loan. Basically, this is a loan that allows you to pay off the original school loan debt, and make one easy payment each month, sometimes at a lower interest rate than the original loan. There are a lot of good reasons to get a school loan, but there are several factors that you should consider before taking on this task. Factors to Consider for a School Consolidation Loan: The first thing that you need to do is make a list of all of the lenders, loan amounts, and interest rates for your school loans. Total up the amounts with interest that you will be paying, and figure out how long it will be before they are all paid off. Keep this summary handy as you shop for a school loan. When you get information for a consolidate debt loans, you will want to total up the
amount you will pay with interest for the consolidated loan, and how long it will take to pay it off. You can compare this with your original summary to ensure that you are actually saving money and time by getting a college consolidation loan. Things to Look for In a School Consolidation Loan: Not all school consolidation loans are the same, and you should really shop around before settling on a college consolidation loan. There is more to consider than just interest rate and payment size. In fact, many school consolidation loans start out with a low introductory interest rate that doubles after six months to one year. Be careful when shopping around and be sure to get all of the details about what might happen with your interest rate in the future. School Consolidation Loan Deferment: Often you can get a deferment on a college consolidation loan. This basically means that you do not have to make a payment on the loan for six months to three years. The thing to watch for here is when the interest kicks in. Some loans may offer a six month deferment with no interest. Others may offer a three year deferment, but the loan builds interest over the entire three years. The most common type of deferment is a three year deferment with the first six months being interest free. You should also check to make sure that making payments before the deferment is over will not cause additional finance charges or early payment penalties. Consolidate debt loans may be an option.
Article Source: http://www.BestToRead.com/

How To Prepare For Small Business Loan?

Small business owners often face difficulty in their business operations as they face shortage of funds. You would need to take necessary steps to avail a small business loan with minimum difficulty. You ought to know what you need to do to clinch the loan deal. If you are going for a start-up business, banks and other financial institutions would turn down your loan application citing the risk factors involved. However, you can still get a small business loan if you have prepared yourself well. Never bank your luck on getting a grant from the government and company agencies. It is even more unlikely that you would get any funds from these sources than getting any money from your own savings, family, friends, or a bank. The main criteria in getting personal loan would be your credit score ratings, business plan, experience in the field of business, education, and most importantly the feasibility of the business that you would want to start, or expanding. The business plan needs to be prepared with due care, since your business viability is reflected in the plan, as also its feasibility. The business plan needs to reflect that in providing the loan, the lender would face minimum risk. The lending institution has a format of questions which your business plan must answer. There questions may be as follows: The first thing it has to answer is how much money that you would need. If you are starting a new business, your business plan must include the capital expenses for your business to st
art. The calculations shown in your business plan must be accurate and it is advised that you should ask for enough money to invest wisely. The next part that you need to explain in your business plan is how you would be spending that money. The loan amount that you are asking for, you would need to provide details as to how this money would be spent on the designated heads. Every dollar that you spend needs to be accounted for. Your small start-up business might require funds for new employees, marketing, etc. which are for the operations of the business; the assets, such as, equipment, real estate, etc; and possibly to pay off your business loans. The question of your payback of the loan must also be answered in your business plan. This needs to be explained in detail, mentioning the kind of cash-flow that you expect, and the time that it would take to achieve the cash-flow. Your financial statements in your business plan must be convincing enough for the lender to believe that you can pay off your loan amount from the cash-flow that you would be generating. While you show your cash-flow in your business plan, you should be able to take the worry away by taking care of government taxes and others, in your financial statements. You would need to keep your staff turnover low for the inherent growth of your company. You would need to plan as to how you would be enhancing your vendor and supplier relationships, and win the market share in the services or product that you are dealing with.
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UK Online Finance - Mortgages & Loans - Credit cards & Insurance

UK Online Finance is a private organisation, which owns and operates this web site. We act as an intermediary presenting a range of insurance and financial products for people in their various life roles as bread winners, family members and individuals. We aim to introduce products which exceed our users' expectations for price, cover and service. If you are a resident of the United Kingdom, need finance for a mortgage or loan and you want to arrange it online then you definitely require the services. We specialists in arranging UK Secured and Unsecured Loans for Homeowners, Tenant Loans for Non-Homeowners and Mortgage to Remortgages. Whatever your circumstances we are confident we have a mortgage product that suits you. We've picked, at random, a handful of the acknowledged UK market leaders. Our comparison page allows you to choose between more than one hundred lenders, so do a calculation with one of the major institutions, then compare lesser known, or local lenders. Varies types of mortgages we offer such as fixed rate mortgages, Capped rate mortgage, discounted mortgages, Variable rate mortgages, Tracker mortgages.

We offer a low rate, cheap loan facility, analysed and applied for online, may save you a lot of money. When it comes to arranging UK Finance Online, we offer exactly what our name states. So you know you are dealing with a professional company. Our processing partners who form our broker and lender panel have been carefully selected to provide the best possible service for you.


We've boiled down the insurance offerings provided by a range of companies to present what we believe is a selection of insurance service providers who can be trusted to look after our web site users properly. We are specialist in Motor Insurance, Online travel insurance, Medical and loss cover for the pet lover, Critical illness cover, Life Assurance, Income Protection, Mortgage Protection, Household, building and contents and Private Medical Insurance. Searching for the best life insurance policy on the web can be a tiresome process, that's why we created an online life insurance search facility. Simply enter your requirements into our system and we will pass your details over to one of our specialist advisors who will search through some of the biggest and most reputable life insurance companies in the market. We have varies types of Policies include as Mortgage life insurance, Term Assurance, Mortgage Protection, Family Benefit, Critical Illness Income Benefit, Waiver Premium, UK life insurance quotes.

Find the best credit card for you from many providers with even more introductory offers,discounts, cash back and APR rates. We also offer credit cards such as 0% balance transfer, Interest Free/Low Interest, Student Cards, Cash back,and No Annual Fee.

We dedicated to providing fast, efficient and economical solutions to your requirement for a whole range of insurance, financial, credit card products,Secured and Unsecured Loans for Homeowners, Mortgage to Remortgages,
Life Assurance, Savings.. Etc

Article Source: http://www.BestToRead.com/

Mortgage & Real Estate Tips For First Time Home Buyers

Are you currently thinking about buying your first house? Real estate is a fantastic investment. Don't let the media hype fool you: low interest rates combined with reduced home prices make this an excellent economic environment for first-time home buyers. Here are a few tips to help you along the way. The first and most important thing to remember is to buy only as much house as you can afford. Just because a lot of young people in your area are buying gigantic homes with acres of property and four car garages doesn't necessarily mean they could afford their mortgages. All you have to do is look at the foreclosures situation to see examples of people who purchased more than they should have. Adjustable rate mortgages, or ARMs, have been exceedingly popular in the last ten years. When the housing market was on fire a few years ago, banks were giving out loans to practically anyone, regardless of their income or credit. ARMs made it possible for people to buy enormous homes even though they didn't make a lot of money because they start out with low payments and then balloon as time passes. This is a big contributing factor to the current housing crisis. More and more people who had adjustable rate mortgage loans are defaulting as their homes go into foreclosure. I tell you this not to discourage you from looking at ARMS, but to help you understand the risks. In fact, FHA offers a great ARM that have 1% annual caps and a lifetime cap of 5%. This will beat any conventional ARM offered. Because the banks are feeling the crunch, credit standards are being raised. If you are uncertain of your credit score, it is wise to check online with a company like Equifax, TransUnion or Experian to find out where you stand before you apply for a home loan. Clear up any financial loose ends and get your score looking the best it can before you start the home loan process. You'll ge
t a better interest rate and have more leverage with lenders. It may even allow you to get 100% financing. Yes, you can still obtain 100% financing and you don't have to be a veteran. As far as your down payment is concerned, you may want to come up with as much money as you possibly can. Why, you ask? PMI, or principal mortgage insurance, will add to your monthly payment until you've paid for twenty percent of your home. Even if you can't get that much money together, and most first time home buyers simply can't, try your best if you want to avoid PMI. As an added bonus, a nice down payment improves your chances of getting your loan in the first place.The good news is that your PMI might be deductible. You have to have an adjusted gross income of under 100K to deduct it all otherwise it will phase out when it reaches 110K. You will pay half a percent to one and half percent of your loan value every year until it reaches approximately 75-80% of either the initial loan balance or of the market value. The rules are different for FHA and conventional loans and vary slightly. Generally,lenders won't tell you that you're eligible to get your PMI dropped from your payment. So, be sure to keep tabs on your remaining loan balance and contact your lender to get the PMI dropped. It will save you quite a bit of money in the long run. Lastly, first-time home buyers will feel much better about purchasing their new home if they learn about the closing process and closing costs. We teach a first time buyer class where we cover this and much more. We recommend you seek out a similar class in your area. The home buying process can be exhilarating and overwhelming, but the more knowledge first-time home buyers have on their side, the better off they are. Keep on learning and happy home buying! You will love your new home, and it will be one of the best investments you'll ever make.
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Understand Mortgage System before Going for a Loan

The method of using a real or personal property as collateral for the payment of debt is called mortgage. Mortgage is the standard method by which an individual or businesses can buy a residential or commercial real estate delaying the necessity to pay the full amount instantly.

The main participants in mortgage are, the lender or the mortgagee, usually a bank, Insurer or a financial institution, which has the legal right to the debt and the debtor or the mortgagor who owes the obligation. Typically, the debtor must fulfill the conditions of the mortgage or he runs into the risk of foreclosure. Debtors can be homeowners, landlords or business who purchase through loan.

The other participants are lawyer or a mortgage broker or a financial advisor. Arranging mortgage is the basic process in which the individuals or corporations are allowed to acquire properties sometimes with the help of mortgage online services, which may also aid in comparing rates between lending companies.

Mortgage is of two types, namely mortgage by demise and mortgage by legal charge. In the first type, until the loan is repaid in full, the creditor becomes the owner of the mortgaged property upon the condition that the property will be returned when the full repayment of the loan has been made. In some countries this type of mortgage has become practically obsolete. In the second type, even though the debtor is the legal owner of the property, the creditor has the right to take possession of the property, foreclose or sell it if the debtor does no
t keep up making regular payments without default. At times the lender may foreclose on the mortgaged property if the loan is not paid and the property may then be sold.

There are two types of mortgage instruments the mortgage deed or mortgage and the deed of trust. The mortgage deed creates a lien on the title and foreclosure of that lien requires a judicial proceeding. The deed of trust creates a lien on the title and not on the title transfer. Here it can be foreclosed by a non-judicial sale. The foreclosure can be much faster for a deed of trust than for a mortgage deal and since the foreclosure does not need any actions by the court, the transaction costs are also less.

Home mortgage loans are of two categories fixed rate mortgages and variable interest rate mortgages. With fixed rate, as the name suggests, the payment remains the same till the loan is paid in spite of variations in the market rate of interest. In variable rate, the interest on mortgage will be changing as per the rate prevailing in the market now and then and hence the total amount to be repaid will be on this basis. The second type is suitable for poor credit.

The services of a broker who has connections with banks and other lenders may be utilized in finding a fair mortgage deal. When there is a need to switch over from fixed rate interest to variable rate or lower interest rate, mortgage refinancing can be done. The best mortgage is the one that enables easy payment of the monthly installments with a low interest rate.


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