Tag Archives: repayment
Mortgage loan for people with bad credit!
When a Mortgage loan for people with bad credit is taken to purchase a house, a charge needs to be created in favour of the lender. The borrower needs to mortgage the property in favour of the lender- the bank or the housing finance institution. This creates a security in favour of the bank. It enables bank to secure the repayment of the people with bad credit Mortgage loan. In case the borrower defaults on the repayment of the Mortgage loan or the interest, the bank can enforce the security. In the case of housing loans, continuing security of the residential building mortgage to the bank is accepted, provided the value of the property is sufficient to cover the liability with the prescribed margin.
Mortgage is a form of hypothecation of the property. A Mortgage loans for people with bad credit can be secured by either an equitable mortgage, a mortgage by way of memorandum of entry, or by a registered mortgage. The type of mortgage differs from one bank to another depending on the loan amount, value of equity, customer profile etc. An equitable mortgage is created by way of deposit of title deeds. The ownership documents of the property are deposited with the bank. No formal mortgage deed is executed. This is the simplest and cheapest form of bad credit mortgage.
Registered mortgage is the safest form of mortgage. This is also referred to as English mortgage. No documents of property are required to create an English Mortgage. The borrower has to enter into a mortgage agreement with the bank. This deed is then stamped and registered in order to make it enforceable. This is an expensive mortgage. The stamp and registration charges have to be borne by the borrower. The borrower binds himself to repay the mortgage loan amount as per an agreed schedule and transfers property absolutely to the mortgagee (lender) subject to the condition that the bank or lending institution would transfer the property back to the mortgagor on repayment dues.
In case of mortgage by way of memorandum of entry, the borrower has to sign a declaration stating that he is mortgaging the property to the lender. This declaration is entered in the memorandum of entry of mortgage which can be enforced by the bank in case the borrower defaults in the repayment of loan dues.
Once mortgaged, the borrower can neither sell nor transfer the property to anyone else without the consent of the bank. While purchasing a property, the purchaser should do a due diligence exercise and visit the registrarÂ’s office to see if any prior encumbrances on the property proposed to be purchased by him are there.
Normally, banks prefer to have the first charge on a property. In case the purchaser has availed of a loan from more than one bank, a pari passu charge may be created in favour of the lenders. However, this usually applies to large projects. In case of a pari passu mortgage, if there is any default in repayment, all the lenders share a right on the property as per the proportion of the loan amount disbursed by them.
The charge needs to be registered with the office of the registrar. Both the lender and the borrower need to be present. The mortgage deal needs to be executed on a non-judicial stamp paper.
Loans: 4 Keys To Better Loans and a Better Credit Score! (Page 1 of 2)
How you manage loans impacts your FICO score more than any other factor in your credit history. It’s true, you are scored heavily on the kinds of loans you have, how many months or years you have had those loans, how much you owe, and your repayment history, are key clues that credit bureaus use to arrive at your credit score. If you can wisely manage your loans, you will add points to your credit score quickly. Here are 4 key tips…
1. When the time is right you should try to refinance your high interest loans.
If you have high interest rate loans, especially on big ticket items like a motor vehicle or home mortgage and interest rates drop two points or more in the market, investigate refinancing some or all these loans. This is especially true if your credit score improves to above 700, even above 750 would be better. But, be wise about how you carry out this tactic.
First, shop loan sources other than the creditor that has your loan now. This way you may force your current lender to compete for your continued business by offering a more favorable interest rate. At the same time, do this only with those lenders who are obviously only interested in making money on you. Stick with lenders with whom you have a good long-term relationship but advise them that you are looking for a lower rate on your loan.
When shopping for credit give potential creditors only your credit score, not your Social Security number, for them to come up with a quote. Giving your S.S. number results in inquiries on your credit report which can damage your score. When they use only your score, no inquiries are recorded.
When seeking loans, you are looking for a lower interest rate or better repayment terms or both. By getting a better interest rate you will save hundreds, perhaps thousands, of dollars in interest. At the very least, getting more favorable monthly repayment terms that you can comfortably afford, will enhance your loan repayment history and automatically improve your score.
Refinancing is ideal for someone who is living from pay-to-pay and having a tough time making their monthly bills and who has been getting late notices or collections recorded in their credit history. It’s also a good idea for someone who has been paying bills on time with no recent negatives in their credit history and who has a good credit score. They will have an easier time refinancing for a better interest rate and more favorable repayment terms.
2. This is not my favorite solution but, if you must, there are loans available for folks with a poor credit history.
If your credit score is really low and you need a loan, you should look into services that provide loans to people with poor credit scores. But, be very careful you do not go even deeper into interest rate debt. There are legitimate lenders who know that some folks with poor credit scores will still make their payments on time if given a second chance and they are willing to speak with anyone that other lenders have denied.