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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!
Investment Property portfolios – 6 Key Strategies for a smart loan (Page 1 of 2)
A booming market for buy-to-let and investment property portfolios has created the need for new types of mortgages and investment property loan facilities. Securing finance for buy to let and holiday rental properties classed as an investment property loan, has never been easier and many of the main lenders have transformed their lending criteria to support property entrepreneurs.
Historically lenders were reluctant to support property investors unless they had serious investment equity ranging from 25-40% of a given properties value. The latest range of financial offerings, are now more in-line with existing household mortgages where buy to let loans are available for up to 90% of the value of the property. The criteria for lending, depends very much on the anticipated yields for the property and to some degree on solid business plans and logic that reflect capital growth in the investment. With a myriad of product offerings available it maybe difficult for a prospective property investor to determine what constitutes a good offer from a financial institution.
The best investment property lenders will look and consider 6 key elements in their risk assessment. So it is very important that you as the proposer understand clearly and prepare in advance a plan that accurately presents your facts in order to pitch smartly to get the finance you need.
6 key Investment Property Loan points
Equity available Know what you have in terms of tangible equity in your home, other investments in assets, and liquidity. Use this valuable information to form the basis of calculating your security to finance the investment plan. This ensures to the lender that you have a sound knowledge of your strategy in investing and you have a good consideration in managing your risk.
Interest Rate Percentages It is generally anticipated that the higher the investment deposit the better the mortgage rate. Buy-to-let mortgages rarely attract the discounts that home mortgages attain. However interest rate benefits are gained if you are prepared to put up front 20 25% of the loan value. Try and avoid low deposits as the rates for larger deposits will be more attractive both in the short-term overhead reduction and long-term gain.
Current debts Ideally all outstanding mortgage and loan liabilities or commitments should be understood and declared when requesting the finance. This will determine the maximum loan available to you for your investment project. Ideally this should be considered in advance of any property speculation or viewing of proposed properties. You may also find through this process that it presents an excellent opportunity to consolidate current finance and reduce overheads through the consolidation process.
Current Income or Salary Lenders will often consider salary and income within the mix of calculating repayments. Multiples of salary are often considered along with the yields or estimated monthly rental incomes from the property portfolio. Important to the property investment will be the current state of the property and whether the property requires investment in refurbishment or modification to enable tenants or renters to occupy.