Dec
31
If you don’t have good credit, you can still own your own home. This is the offer that many people noticed a few years ago. These people rushed to get their own homes and signed up quickly for their low interest rate loans. They couldn’t believe their luck. Before, nobody would give them a chance but now here’s a lender that’s willing to move them into a new home and with such a low interest rate.
Unfortunately, the majority of people who purchased homes by means of this type of mortgage did not carefully analyze the details hidden in the fine print of their loan agreements. Because of that, they had no clue that their interest rate was set to skyrocket after a few months or years. Since they were not expecting it, that interest rate increase made it impossible for the individuals who took the loans out to continue making payments on their mortgages. This sad situation is now happening all over the country.
The monthly payment increases that occurred as a result of the jump in interest rates were overwhelming for many homeowners. In some cases, people’s payments more than doubled. This unexpected increase in interest rates left many people unable to make payments. They then found themselves being served foreclosure paperwork, threatening eviction if they were not able to pay off their mortgages.
A mortgage foreclosure is when you are forced to leave your home. Your home is then put up for resale or it is auctioned. You see, the bank or the lender would rather have someone else in the home who is able to make payments than to have you live there for free. They don’t care who lives there, as long as whoever does pays their mortgage.
Protect Yourself
The best way to keep yourself from getting into a similar situation is to read all of the details found in the fine print of a loan agreement before you agree to or sign anything. If your interest rates are going to go up and you know that at the time you take out a loan, you will be able to prepare for the increase and budget yourself accordingly.
So get into the habit of always reading the fine print on everything you sign, whether it’s for a new house or for a new car. Everything that you finance can suddenly jump up in price if the fine print says your interest rates are going to increase and that’s what happens with mortgage foreclosures all the time.
Before they know it, many people find themselves homeless because they suddenly are no longer able to make their mortgage payments. By being a wise consumer and reading the fine print in any contracts before you sign them, you can keep yourself free of the misery of foreclosure.
Dec
29
Real estate can be funny thing; there are some strategies in real estate investing that are only successful when the economy is down and values are declining.
If you are ready to dive in and invest in real estate, then here are some helpful tips:
Finding Great Deals
Look closer at the current situation in today’s real estate market, which I call “The Perfect Storm” We have an over-abundance of bank owned properties and foreclosed homes The economy is down; many are unemployed Interest rates have recently hit record lows
This is a buyers market with many great buys on real estate all over the US. There is a variety of deals located in urban, suburban and rural areas with asking prices below their potential market value.
Taking Action
So, how do you get started if you are limited on funds to invest or if you already work full time? If this is something new for you, the best thing you can do to ensure success is to work with a real estate investing professional. A partnership with an investor who has knowledge and expertise in the market can help you maximize your real estate investing experience. Team up with a professional who provides top notch service so that your business grows and thrives.
Providing a great real estate service generates more business through client referrals; referrals are a key to an investor’s success.
An experienced realtor understands the current real estate market; utilizing their services can save you a lot of time while quickly recognizing new opportunities and generating big profits. Getting started with investing on your own can pose financial and liability risks.
There are plenty of on-line real estate investors and listings for great deals, which are accessible to the general public; there are also data bases for licensed agents who pay for the service. Your real estate agent will have access to the necessary tools and will possess knowledge of the latest technology so you will be the first to be informed about great real estate buys.
Closing the deal
Your savvy, experienced Realtor has many strategies to help the Investor to close the deal, whether the scenario is foreclosure homes, HUD properties, Wholesale deals or short sales. A Real Estate professional can structure the purchase offer, suggest financing, and refer other real estate professionals to create a winning closed deal.
Choosing a Real Estate Professional
Talk with Investors in your area, join local REIA clubs and attend meetings hosted by Realtor organizations to find the Real Estate Professional that will support your real estate business. A lot of real estate investors like to work in partnerships; many like to mentor new investors too.
The market is right for real estate investing; experienced real estate investors know how to recognize opportunities in today’s market. If you are considering entering the real estate world, it is recommended that you find a mentor to work with. Real estate partnerships are also valuable to the experienced investor.
Dec
29
How to Know if You Qualify for Today’s Best Mortgage Rates
Filed Under Mortgage Refinance | Leave a Comment
Equity With the majority of the country in a declining real estate market the amount of equity you have in your home plays a major factor in your loan qualification. Homes that are similar in size to your home and are in the same vicinity determine the current value of your home. What have the homes that have recently sold in your area gone for? Most homes are losing value due to the rise in the current foreclosure market. If the bank had to foreclose on a property they need to be able to sell it for what the market supports so this is how they value it. (Bank foreclosures are not in the interest of the bank.)
If you are looking to purchase a home or refinance your existing home into a lower rate or different loan program the amount of equity you have in the property is one determining factor for what loan programs you qualify for and if you can get the best current market rate.
Income “Can they afford the new payment if we give them a loan?” This is the first question the bank is going to ask themselves before they agree to extend you a mortgage. You need to be able to document your current income and your income for the two years prior to show you have a history of sustained or increased income. The banks look at your current debt to judge your ability to handle your loan payment. If your loan is under $417,000 they want to make sure that your income is double your monthly debts. (excluding utilities and other miscellaneous debts that do not get reported to the credit agencies. If your loan amount is over $417,000 the same rules apply but they look to see that your debt is at or below 45% of your income.
Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.
Credit Score Good credit score and great rate go hand and hand. The better your score the less risky an investment your loan is to the bank because you have proven across the three major credit reporting agencies (Transunion, Experian, and Equifax) that pay your debts back. If your middle credit score from all three bureaus is 720 or above you qualify for the best rates. You have shown them that not only can you afford your loans but you honor them. This helps you qualify for a lower rate because the bank sees you as a stable investment and can count on making less interest on your loan for a longer period of time rather than charging you more interest so they can capture as much of their money back as possible in the event that you do not pay them back.
Now that you know what will be looked at when you apply for a loan and if you meet all this criteria you can begin your search to find the best mortgage companies that deliver what they promise. Your home financing is one of the largest investments you will make in your entire life. If you have proven that you will honor your commitments you should get a great deal!
Dec
28
People who have had problems with credit in the past find that it is very difficult to be approved for a credit card; they may even be completely unable to qualify for a traditional credit card. This is a tough situation to be in – it’s hard to get by without a credit card these days.
Want to rent a car? Reserve a hotel room? Buy plane tickets online? You need a credit card for all of these and other activities which are part and parcel of ordinary life for many. Without a credit card, whole sectors of the economy are basically closed to you – it’s a hassle and makes you feel like a second class citizen!
However, there is some good news. Even if you have bad credit, it is still possible to get a credit card; there are a couple of options available to you no matter what kind of credit history you may have. These credit cards come with some conditions and charges not associated with traditional credit cards, but they can help you to participate more fully in the economy and can also help you to rebuild your credit.
If your credit history is less than perfect, then there are cards available from some credit card companies which work like traditional credit cards, but have higher interest rates and annual fees than an ordinary card. These extra costs can be well worth it when trying to reestablish a good credit history and have the conveniences offered by having a credit card.
Another option for people with bad credit who want to get a credit card is a secured credit card. You will have to put down a deposit in order to secure the card (this is usually a few hundred dollars) and these cards will also usually have a low limit on spending, but they can help to build your credit rating and can be used just like a traditional credit card.
Yet another idea for those who cannot qualify for a traditional credit card is a prepaid credit card. These work like any other credit card in that they can be used anywhere that credit cards are accepted, but they are linked to an account into which you must make deposits before the card can be used. These offer the benefit that you cannot get yourself into debt – you cannot spend more than you have deposited in the account.
These prepaid credit cards do not have all of the advantages of traditional credit cards, but they do allow you to have access to those transactions which can only be done by credit card. These cards are a good tool for those rebuilding their credit and trying to keep a handle on their spending as they do so.
Bad credit can be tough to deal with. Don’t give up; these credit cards for bad credit can help you as you rebuild your credit – just be careful with your new credit card!