Category Archives: Home Mortgage
Are Bad Credit Re-Mortgages Impossible?
So many of us feel that having bad credit will make a re-mortgage impossible or very close to impossible to say the least. With so many of the traditional lending institutions not even wanting to speak to us, slamming the proverbial door in our faces before we can open our mouth to speak our case, very few options seem to be left. But there is hope- and yes, a bad credit re-mortgage is 100% possible! You just need to look beyond the banks, a ways past the non-traditional lenders.
Believe me, potential creditors dont care why your credit is poor, just that it is – so you dont feel the need to explain. Some of us have gone through the unpleasantness of a divorce, creating a drop in finances and related credit score. Others lost their employment and have fallen behind on their bills. Still others had to file bankruptcy for one reason or another. Whatever your situation, you just need to find a quality, sub-prime mortgage lender!
Sub-prime mortgage lenders specialize in people like us, both for refinancing a current mortgage (also known as a re-mortgage) or buying a new home. Of course, there are a few things you should be aware of before you take advantage of one of these loans.
First, you should know that the lower your credit score, the more your re-mortgage is going to cost. The current industry average (sub-prime/bad credit re-mortgage industry) is 4%, but can go as high at 7%. This means that you, as a bad credit home loan borrower, are typically charged an average of 4% more than a borrower with good credit thats getting into the same general loan program. This percentage can be in charged in a bunch of different ways, including interest, points, and a wide variety of bad credit fees.
Dont think that the types of mortgages that you can qualify for are extremely limited, because you couldnt be more wrong, theyre just going to cost you a bit more. You can even apply for a mortgage that allows you to take out extra money to pay off high-interest credit card bills and auto loans, if thats what you need to help your financial situation!
Of course, your interest rate will also reflect your LTV, or Loan to Value ratio. This number stems from the amount your home is worth and compared to the amount of the loaned mortgage amount. The higher the loan amount to your homes worth, the more you will pay each month. This is true of all mortgages, no matter what you credit score may be.
Before signing any re-mortgage agreement, be sure to shop around to get the best deal. This will also keep any predators at bay from trying to take advantage of you as you re-mortgage your current home loan!
Applying for a Secured Loan 101
If youve made the decision to apply for a secured loan, youre likely to have done a bit of homework in regards of current interest rates, traditional fees for preparing the necessary documents, and of course, the fee your lender will charge you for your secured loan. If you have yet to accomplish the above tasks, you should at least begin the process before you begin to contact potential secured lenders. So heres a bit of basic info for you (and if youre already familiar with it, lets just consider it a refresher course, shall we?).
The most common type of secured loan is a mortgage; one of the largest bills that you will ever have in your life. There are a wide variety of fees in all shapes, sizes and colors for you to decipher through, so be sure to pack your x-ray goggles!
First things first, we have the APR its the amount that you will be paying each year for your loan. Also known as the Annual Percentage Rate, it will include the interest rate, fees, and certain other charges calculated on a yearly basis to come up with one complete percentage. Its usually a bit higher than the interest rate that youre quoted, as it includes the other fees.
Be sure that you know the terms for fees as many of them can be hidden or covered up as something else. Points are one of the more popular fees, and can range in purpose to get you a lower interest rate to an honest loan officer telling you thats how hell fill his paypacket. When in doubt, ask questions! If youre not happy with the answers you received, ask someone else. Ask all the way up to the president of the company, as this is your money were talking about here. And dont sign anything that youre not 100% sure about.
And last but not least, be sure to shop around- dont put all of your eggs into one proverbial basket, so to speak. There are, unfortunately quite a few bad loan originators (often referred to in the industry as predators) in the secured loan industry that are completing the old Bait and Switch routine on you- promising the moon and stars to you, their special client, but all the while they have no such program waiting for you (and you are now in a difficult position: either choose the horrid loan program that you got switched into, or no loan at all). By shopping around, and informing the competing lenders that they are not alone, you are setting yourself up for an ideal, winning secured loan situation.
When the application process commences, its very important to remember that you can change your mind at any time without penalty or fine. Sometimes our gut instinct tells us something that we just cant avoid, and its often best to listen to our gut