Dec
31
Can You Get a Mortgage With Bad Credit?
Filed Under Finance | Leave a Comment
Shelly Evans asked:
Applying for a mortgage loan can become more difficult when your credit score becomes a hindrance. Banks and lending companies generally look for customers with good or excellent credit to minimize the risks. If you have bad credit, a mortgage lender may consider you as a “high risk” customer, and thus, decline your home loan application.
However, it is still possible to acquire home loan financing despite having bad credit. In this post, let’s talk about some points you can consider if you plan to obtain a mortgage loan.
FHA and VA Loans
A consumer can get an insured loan from the FHA (Federal Housing Administration) or the VA (U.S. Department of Veterans Affairs). FHA insured loans are offered to consumers who belong to the low income bracket that they cannot afford to pay the standard down payment required by lenders. VA insured loans are available for military veterans.
If you are eligible to apply for FHA or VA loan, then you can get home financing even if you have a low FICO rating. In fact, some lenders accept credit scores as low as 580. The minimum qualifying score varies from one lending company to the next.
Piggyback on Someone Else’s Good Credit
If you need to apply for a mortgage loan but with bad credit, you might be able to improve your chances by getting a co-signer. Needless to say, you need to find a co-signer with excellent credit rating. More importantly, you need to find someone who is willing to co-sign your home loan on your behalf.
Co-signing a loan is a serious responsibility. Keep in mind that in the event of default, it is the co-signer who is held responsible for the repayment of the debts. With this in mind, finding a co-signer who will back-up your mortgage loan will not be easy. If you are a couple and one of you has excellent credit, then the one with a more favourable rating can apply for mortgage.
Raise Your Credit Score
Have you checked your credit report? It may be possible that the reason for your very low score is that there errors or unauthorized charges in your report. Sometimes, another person’s credit history may have been mixed-up with your file. Therefore, before applying for mortgage, you should order a copy of your credit report from each of the three major credit bureaus.
Carefully scan your report for errors or misinformation. Should you find any, sent a letter right away to the bureau that issued your report so that an investigation can be started right away. If proven correct, instantly improve your score by a number of points and the bureau will send you an updated copy of your report for free.
Wait Awhile
Is it possible for you to wait out for another six months to a year before applying for mortgage? If yes, then you are encouraged to wait awhile so you can work on improving your credit score. This way, you better mortgage loan options will be available for you. Not only can you expect easy approval but good rates and reasonable repayment terms as well.
Lydia
Applying for a mortgage loan can become more difficult when your credit score becomes a hindrance. Banks and lending companies generally look for customers with good or excellent credit to minimize the risks. If you have bad credit, a mortgage lender may consider you as a “high risk” customer, and thus, decline your home loan application.
However, it is still possible to acquire home loan financing despite having bad credit. In this post, let’s talk about some points you can consider if you plan to obtain a mortgage loan.
FHA and VA Loans
A consumer can get an insured loan from the FHA (Federal Housing Administration) or the VA (U.S. Department of Veterans Affairs). FHA insured loans are offered to consumers who belong to the low income bracket that they cannot afford to pay the standard down payment required by lenders. VA insured loans are available for military veterans.
If you are eligible to apply for FHA or VA loan, then you can get home financing even if you have a low FICO rating. In fact, some lenders accept credit scores as low as 580. The minimum qualifying score varies from one lending company to the next.
Piggyback on Someone Else’s Good Credit
If you need to apply for a mortgage loan but with bad credit, you might be able to improve your chances by getting a co-signer. Needless to say, you need to find a co-signer with excellent credit rating. More importantly, you need to find someone who is willing to co-sign your home loan on your behalf.
Co-signing a loan is a serious responsibility. Keep in mind that in the event of default, it is the co-signer who is held responsible for the repayment of the debts. With this in mind, finding a co-signer who will back-up your mortgage loan will not be easy. If you are a couple and one of you has excellent credit, then the one with a more favourable rating can apply for mortgage.
Raise Your Credit Score
Have you checked your credit report? It may be possible that the reason for your very low score is that there errors or unauthorized charges in your report. Sometimes, another person’s credit history may have been mixed-up with your file. Therefore, before applying for mortgage, you should order a copy of your credit report from each of the three major credit bureaus.
Carefully scan your report for errors or misinformation. Should you find any, sent a letter right away to the bureau that issued your report so that an investigation can be started right away. If proven correct, instantly improve your score by a number of points and the bureau will send you an updated copy of your report for free.
Wait Awhile
Is it possible for you to wait out for another six months to a year before applying for mortgage? If yes, then you are encouraged to wait awhile so you can work on improving your credit score. This way, you better mortgage loan options will be available for you. Not only can you expect easy approval but good rates and reasonable repayment terms as well.
Lydia
Dec
29
tom s asked:
My wife and I bought a new double wide, we lost everything getting this house and often told our salesman we cannot afford it, he said we would be fine and it was too late we signed an agreement. Now our home is in foreclosurer and we were prepared to move out once the bank sold it, this past Saturday we recieved a lettyer from the United States district court in Vermont, stated that the guy who intailly did our funding was convicted of fraud, come to find out 3 people who work on or funding for this house were also convicted of fraud, they were the “middle men” between us and the bank. I know he stole over $8400.00 from us according to the FBI, we will get that back, but had they not lied we would not be in this mess, I guess the bank is stuck too, what will happen to our house? Does the bank sue him, work out a new morgage with us? or are the bank and us out of luck?
Connie
My wife and I bought a new double wide, we lost everything getting this house and often told our salesman we cannot afford it, he said we would be fine and it was too late we signed an agreement. Now our home is in foreclosurer and we were prepared to move out once the bank sold it, this past Saturday we recieved a lettyer from the United States district court in Vermont, stated that the guy who intailly did our funding was convicted of fraud, come to find out 3 people who work on or funding for this house were also convicted of fraud, they were the “middle men” between us and the bank. I know he stole over $8400.00 from us according to the FBI, we will get that back, but had they not lied we would not be in this mess, I guess the bank is stuck too, what will happen to our house? Does the bank sue him, work out a new morgage with us? or are the bank and us out of luck?
Connie
Dec
28
can I file for bankruptcy and still keep some of my accounts open and current?
Filed Under Personal Finance | 2 Comments
mattm815 asked:
I need to file for bankruptcy but I want to keep some of my accounts open and up to date , like my morgage and two of my credit cards that are in good standings. Please help
Matt
Joe
I need to file for bankruptcy but I want to keep some of my accounts open and up to date , like my morgage and two of my credit cards that are in good standings. Please help
Matt
Joe
Dec
28
Current Mortgage Rate Predictions
Filed Under Real Estate | Leave a Comment
Mark Bennett asked:
Making mortgage rates predictions is a little tricky. Financial markets, including those which set share prices and mortgage interest rates, are chaotic systems. This is not to say they are chaotic in the common usage of the term, meaning something with no order to it at all, but they are chaotic in the mathematical sense, in that the formulas which describe how mortgage interest rates are determined, which are the formulas used to make mortgage rates predictions, have self-referential components.
Making mortgage interest rates predictions is like making weather predictions – it is impossible to be precisely accurate with mortgage interest rates predictions, and the further in advance you try to predict mortgage interest rates, the greater the margin of error in the prediction.
On the other hand, chaotic systems are predictable in broad terms.
If you think about predicting the weather, you may not be able to predict the top temperature for a given day in August, but you can reasonably sure it will be within a certain range – say, if you live in Orlando, between 80 and 95 degrees F, and if you live in Copenhagen, between 16 and 25 degrees C.
Just as climate gives a broad indicator of summer top temperatures, economic climate gives a broad indicator of mortgage interest rates.
Factors Which Make Mortgage Rates Rise: Inflation
So called “real interest rates”, the interest rates which move in response to supply and demand in the financial markets, are independent of inflation. To get from the “real interest rate” to the “nominal interest rate”, which is what your bank will charge you for your mortgage, you simply add on the annualised percentage rate of inflation.
Factors Which Make Mortgage Rates Rise: Reduced Availability Of Credit
Financial markets operate on supply and demand. If there is a limited supply of anything, then it will go to those who are willing or able to pay more for it. The same is true of mortgage money. Mortgage rates predictions will take into account whether the supply of money is increasing or decreasing, and likewise, the trends in demand for money.
Factors Which Make Mortgage Rates Predictions Rise: Increased Risk
Apart from the underlying real interest rate determined by the broader economy, the rate of inflation, and the supply of money available for mortgage lending, there is another factor which comes into play in any investment decision – risk. Mortgage rates in general will depend on the overall risk involved in the housing market.
If house values plummet, as they have in some parts of the US, then the default risk for the banks suddenly increases, which means that they will be wanting to charge higher mortgage interest rates; predictions will take this upward pressure into account.
Factors Which Make Mortgage Rates Predictions Fall: Government Intervention
The US Government is an 800-pound gorilla in the financial markets. By issuing Treasury bonds at different interest rates, the government can influence the overall market for money, and thus affect the “real” interest rate.
Mortgage rates predictions based on purely economic considerations might indicate that mortgage interest rates are due to rise, but while the political pressure is running high, and in an election year, the government will do everything in its power, however economically irresponsible in the long term, to push the interest rate rises off until after the November elections. Mortgage rates predictions must take this political distortion of the financial markets into account.
Kristin
Making mortgage rates predictions is a little tricky. Financial markets, including those which set share prices and mortgage interest rates, are chaotic systems. This is not to say they are chaotic in the common usage of the term, meaning something with no order to it at all, but they are chaotic in the mathematical sense, in that the formulas which describe how mortgage interest rates are determined, which are the formulas used to make mortgage rates predictions, have self-referential components.
Making mortgage interest rates predictions is like making weather predictions – it is impossible to be precisely accurate with mortgage interest rates predictions, and the further in advance you try to predict mortgage interest rates, the greater the margin of error in the prediction.
On the other hand, chaotic systems are predictable in broad terms.
If you think about predicting the weather, you may not be able to predict the top temperature for a given day in August, but you can reasonably sure it will be within a certain range – say, if you live in Orlando, between 80 and 95 degrees F, and if you live in Copenhagen, between 16 and 25 degrees C.
Just as climate gives a broad indicator of summer top temperatures, economic climate gives a broad indicator of mortgage interest rates.
Factors Which Make Mortgage Rates Rise: Inflation
So called “real interest rates”, the interest rates which move in response to supply and demand in the financial markets, are independent of inflation. To get from the “real interest rate” to the “nominal interest rate”, which is what your bank will charge you for your mortgage, you simply add on the annualised percentage rate of inflation.
Factors Which Make Mortgage Rates Rise: Reduced Availability Of Credit
Financial markets operate on supply and demand. If there is a limited supply of anything, then it will go to those who are willing or able to pay more for it. The same is true of mortgage money. Mortgage rates predictions will take into account whether the supply of money is increasing or decreasing, and likewise, the trends in demand for money.
Factors Which Make Mortgage Rates Predictions Rise: Increased Risk
Apart from the underlying real interest rate determined by the broader economy, the rate of inflation, and the supply of money available for mortgage lending, there is another factor which comes into play in any investment decision – risk. Mortgage rates in general will depend on the overall risk involved in the housing market.
If house values plummet, as they have in some parts of the US, then the default risk for the banks suddenly increases, which means that they will be wanting to charge higher mortgage interest rates; predictions will take this upward pressure into account.
Factors Which Make Mortgage Rates Predictions Fall: Government Intervention
The US Government is an 800-pound gorilla in the financial markets. By issuing Treasury bonds at different interest rates, the government can influence the overall market for money, and thus affect the “real” interest rate.
Mortgage rates predictions based on purely economic considerations might indicate that mortgage interest rates are due to rise, but while the political pressure is running high, and in an election year, the government will do everything in its power, however economically irresponsible in the long term, to push the interest rate rises off until after the November elections. Mortgage rates predictions must take this political distortion of the financial markets into account.
Kristin
Dec
27
Mortgage Net Branch
Filed Under Real Estate | Leave a Comment
Ken Marlborough asked:
A mortgage net branch is an arrangement in which an existing mortgage company gives a franchise to another mortgage company in order to carry out its business in a particular area. The company that gives the franchise is called the mortgage originator, while the company that takes the franchise is called the mortgage net branch. This arrangement is done by some companies who wish to expand their business into newer areas. Mortgage net branches may be small companies in their own right, or they may be mortgage brokers.
There are certain prerequisites to become a mortgage net branch. The mortgage professionals wishing to become a net branch must be licensed. Licensing requirements vary from state to state and are controlled by the Housing and Urban Development (HUD) code. Most mortgage originators want their net branches to have at least three years of prior experience in the field of originating, processing, undertaking and risk analysis of all types of mortgages.
Some huge mortgage companies conduct written examinations for candidates wishing to become their net branches. Apart from these, other factors like having premises, goodwill in the market and superior communication skills are also desired. There is some kind of payment to be done to the originator by the net branch. The process is totally formal and documented, as the prospective net branch has to fill application forms.
Net branching is a viable option for small amateur mortgage companies to get nationwide exposure. This is possible, as the originators are big companies that are already functional on a countrywide basis. On the other hand, the originator is able to expand its business by enlisting the services of a net branching franchisee. Hence, mortgage net branching is a mutually benefiting symbiotic relation between the originator and the net branch.
But mortgage net branching has its downsides, too. Parties opting to become net branches are more often than not obliged to give up their original identities and take up new ones as desired by the originators. This makes the net branch lose its individuality. Also, the net branch does not have total liberty to undertake its tasks, as it has to work under orders issued by the originator. Hence, brokers and companies with several years of experience behind them do not accept the idea of becoming net branches that easily. Net branching is considered by new entrants in the field wishing to cash in on the goodwill of the originating company.
The business of mortgage net branching is expanding rapidly day by day. Clients are only too happy to deal with branches of esteemed companies in their vicinities. In fact, it is mortgage net branching that has made the buying of mortgages such an immensely popular phenomenon.
Vicki
A mortgage net branch is an arrangement in which an existing mortgage company gives a franchise to another mortgage company in order to carry out its business in a particular area. The company that gives the franchise is called the mortgage originator, while the company that takes the franchise is called the mortgage net branch. This arrangement is done by some companies who wish to expand their business into newer areas. Mortgage net branches may be small companies in their own right, or they may be mortgage brokers.
There are certain prerequisites to become a mortgage net branch. The mortgage professionals wishing to become a net branch must be licensed. Licensing requirements vary from state to state and are controlled by the Housing and Urban Development (HUD) code. Most mortgage originators want their net branches to have at least three years of prior experience in the field of originating, processing, undertaking and risk analysis of all types of mortgages.
Some huge mortgage companies conduct written examinations for candidates wishing to become their net branches. Apart from these, other factors like having premises, goodwill in the market and superior communication skills are also desired. There is some kind of payment to be done to the originator by the net branch. The process is totally formal and documented, as the prospective net branch has to fill application forms.
Net branching is a viable option for small amateur mortgage companies to get nationwide exposure. This is possible, as the originators are big companies that are already functional on a countrywide basis. On the other hand, the originator is able to expand its business by enlisting the services of a net branching franchisee. Hence, mortgage net branching is a mutually benefiting symbiotic relation between the originator and the net branch.
But mortgage net branching has its downsides, too. Parties opting to become net branches are more often than not obliged to give up their original identities and take up new ones as desired by the originators. This makes the net branch lose its individuality. Also, the net branch does not have total liberty to undertake its tasks, as it has to work under orders issued by the originator. Hence, brokers and companies with several years of experience behind them do not accept the idea of becoming net branches that easily. Net branching is considered by new entrants in the field wishing to cash in on the goodwill of the originating company.
The business of mortgage net branching is expanding rapidly day by day. Clients are only too happy to deal with branches of esteemed companies in their vicinities. In fact, it is mortgage net branching that has made the buying of mortgages such an immensely popular phenomenon.
Vicki