Home Loans With Bad Credit is Available - Read On..

We don't claim that you are ignorant where Home Loans With Bad Credit is concerned. What we claim that if you read this article about Home Loans With Bad Credit, you would certainly gain some info about Home Loans With Bad Credit.

If you have been searching for information on Home Loans With Bad Credit and have not been satisfied with what you got, read this article. We sincerely hope that this article would fulfill your needs. You have just seen the house of your dreams but you have had credit problems. The ability to find home loans with bad credit can be difficult but not impossible.

Since you are reading this article on Home Loans With Bad Credit, you should be asked this question. Do you still feel that you knew all that was to be known about Home Loans With Bad Credit?

Prior to 1990 if you did not qualify for a FHA or VA home mortgage it was very difficult to get a mortgage. This since has changed and there are companies providing home loans with bad credit on a daily basis. These loans were introduced to help high risk borrowers to secure a mortgage and become homeowners.

There is no limit to knowledge and information and that must have been amply demonstrated to you by this article on Home Loans With Bad Credit now when you are reading it. There is always something which could be added to any collection of knowledge and information.

When you are looking for home loans with bad credit you will probably want to look into what is called a subprime loan. This is a loan to persons with a damaged credit history and would be considered a high risk borrower. Because of the higher risk, subprime loans normally require a larger down payment and a higher interest rate. The higher the risk the lender feels you are, based on credit scores and other factors the higher the rate to borrow will be. If the risk seems lower you could receive a lower rate and lower down payment even if you are still considered a high risk borrower.

If you are interested in Home Loans With Bad Credit, you must be feeling now that you came to the right place to get knowledge about it. You just need to complete reading this article to complete this exercise of gaining information.

Most subprime loans have .1% up to .6% higher rates than those of a conventional loan. This may not seem like a lot but when thinking in terms of a $100,000.00 dollar home the difference is in thousands of dollars. So even if you are considered a candidate for a subprime loan it is important to shop for the best rate available.

Now, when you are reading this article on Home Loans With Bad Credit, you must have realized that there always remains something more to be known about any topic. We have tried to incorporate almost everything of consequence on Home Loans With Bad Credit and hope that you would benefit from it.

Home loans with bad credit are made because lenders know that often a person with less than perfect credit did want to make their payments but because of illness, loss of employment or some other event out of the borrowers control may contribute to late payments or foreclosures.

It is true that so many articles are available on the net about Home Loans With Bad Credit and you must have read quite a few of them. Now, when you are reading this article, don't you feel that we have actually tried to offer something different to our readers.

If you were searching for home loans with bad credit you will want to keep in mind a couple of important tips. You will want to plan on keeping this loan, for about two to five years. You will want to be using this time to help increase your credit worthiness by cleaning up old debts and obligations. You will want to be sure to make your new mortgage payments on time. After this process you can try and qualify for one of the more common and lower rated loan.

If you already own a home, and had some financial difficulties a subprime loan may help you to regain your credit status. By refinancing with home loans for bad credit you can refinance for more than you owe. Take the cash back on the equity you have and use this to pay off high interest credit cards, liens, or collections. You would save money each month and be rebuilding your credit rating at the same time.

As you can see finding home loans with bad credit is a bit costly but it is not impossible and the final outcome is with good money management you increase your credit rating and own the home of your dreams.

We have tried our best to resolve all the doubts that might be in the minds of the readers about Home Loans With Bad Credit. We hope that you might benefit from all this discussion.

We have presented all the fundamentals of Home Loans With Bad Credit but if your doubt continues, you should surely and certainly consult some expert.

About the Author

For More Hot Tips and Latest Information, Hurry On to:
Bad Credit Home Loans

Four Truths About Mortgage Refinancing

Many home buyers close their loans, make their payments and don't think about their mortgages again. They don't consider refinancing when they should. If you are among these inattentive homeowners, here are four truths about mortgage refinancing that may surprise you.

Truth #1 - Mortgage Refinancing can save you money. If interest rates have dropped since you got your original loan, refinancing can reduce your monthly payment. When you refinance, you can also choose to shorten your loan term, meaning you will pay less money in interest over the life of the mortgage.

You could also save money by switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. The interest rate on an ARM is based on an index such as the LIBOR or the U.S. Treasury Bill. If they go up, so do your payments. By refinancing to a fixed-rate mortgage, you can prevent payment increases. (Your monthly payment might still increase due to changes in property taxes or insurance, but your principle and interest amounts will stay the same.)

If your original mortgage was for more than 80 percent of your home's value, you are paying private mortgage insurance (PMI) as part of your monthly payment. As the value of your home increases and the principle on your mortgage decreases, you can get rid of PMI by refinancing for less than 80 percent of your home's value.

Truth #2 - Mortgage Refinancing is a smart way to access your equity. In the second quarter of 2006, 88 percent of Freddie Mac-owned loans that were refinanced resulted in new mortgages with loan amounts that were at least five percent higher than the original mortgage balances. Homes refinanced during this time had appreciated 33 percent on average since the original mortgage was taken out. The median age of the mortgage was 3.2 years.

"Borrowers who are looking for an inexpensive way to finance home improvements or business investments, or to consolidate high cost debt, are turning to cash-out refinance," said Amy Crews Cutts, Freddie Mac deputy chief economist. "These borrowers are often willing to refinance into higher rates on their first lien mortgages. . . This is the second consecutive quarter in which the median refinance borrower increased the rate on their first lien mortgage."

Truth #3 - Mortgage Refinancing is still very popular. According to Frank Nothaft, Freddie Mac chief economist, "The staying power of refinance activity has been much stronger than we initially thought . . . borrowers are reacting to both incentives to cash out home equity through refinance and incentives to change their mortgage as they hit an interest rate adjustment.

Freddie Mac estimates that $500 billion in first lien mortgages will adjust this year and another $650 billion in second liens will see at least one rate change this year. Nationally, home values increased 10.2 percent over the last twelve months.

Truth #4 - Mortgage Refinancing is simpler than getting your original mortgage. Mortgage refinancing is almost always simpler, cheaper and quicker than getting an original mortgage. The process can be handled online at sites like Simple Mortgage Refinancing. The site has helpful articles and offers free, no-obligation loan quotes.

About the Author

Mike Hamel is the author of three business books and several articles about mortgage financing. His material is featured on sites like Bad Credit Mortgage Refinancing.

Mortgage Refinancing Below 500 FICO

If you have been turned down for a mortgage refinance, especially a cash out or debt consolidation refinance, because your lender says your credit score is under 500, there are a variety of new options and strategies available which can help you get the cash you need now to pay off your credit card debts, collection accounts, and other derogatory or poor credit accounts and improve your FICO credit score to the point where you can qualify for a low interest, fixed rate loan.

First, you may be wondering why the number 500 is such a big deal. A FICO credit score is a number from 300 to 850 which is meant to represent your reliability as a borrower, and takes into account how much credit has been extended to you, how much money you owe and whether or not you pay it on time. Banks like to tell us that 99% of people in the US have credit scores of 500 or higher, and use this as an excuse not to even bother lending to people with credit scores under the magic 500 FICO score. As far as they're concerned, since only 1% of the population has a FICO below 500, they simply don't have the time to design programs to help these people buy or refinance homes.

We've worked with dozens of people who have come to us with FICO scores below 500 over the years, and every one of them says the same thing. "I just need help right now, and everyone I talk to keeps saying NO". This is because until very recently, it was extremely difficult to get a loan if your credit score was 499 or less, and even today, only a few mortgage lenders, whether they're banks or brokers, have the time or attention required to focus on the needs of what they think are a few unfortunate people. So until very recently, if your credit score was under 500, you had almost no options to refinance your home.

Many people have touted the benefits of credit repair services to prospective borrowers with scores under 500. The proposal often reads like this, first, give them a thousand dollars out of your pocket to fix your credit, which they will accomplish in six months, and then once your scores are over 500, they get a loan done for you. Of course never mind that $1,000 is a lot of money for most people with 700 credit scores, and very often a heck of a lot for an individual seeking a mortgage / refinance to consolidate debts. Add to that the fact that conventional credit repair takes too long for most people to wait without the extra cash to pay off bills that you get with a refinance, and you can see that credit repair by itself is not a very efficient proposition if what you really need is a refinance loan today. That's not to say credit repair doesn't work, it's just that it doesn't work very well for most people who are under 500 FICO seeking a debt consolidation, refinance or home purchase loan.

Over the years we've taken a harder look at the numbers, and it turns out that the banks and credit reporting agencies may have drastically underestimated the number of people in this country whose credit ratings are actually under 500 FICO. There are literally millions of people nationwide who fit into this category, and we have spoken with our share. What do we know? That most people with credit scores below 500 are hardworking, honest people whose credit is suffering from the realities of living and working in America today. As tight as our budgets are stretched in this country today, it only takes a very short term disability or unemployment to severely damage our credit scores. And some of us might have gotten in a little over our heads when we were younger, but in the years since we've been trying to get back on the road to good credit, and we're sick of getting charged sky high interest rates every time we get a new credit card, apply for a car loan, or get denied for a bank loan and wind up calling on the aforementioned hard money / private mortgage lenders. We knew the banks had missed something. Our friends below 500 were not only more numerous than they had previously estimated, they were also more than some credit score, they were good people.

So we developed a strategy which we are sharing in the hopes that other borrowers under 500 can reap some of the benefits that our own clients have. We've helped borrowers with no money in the bank, $50,000 of bad debt, and sky high monthly payments driving them into the poor house get out of debt, get some money in their pockets and eventually achieve major financial improvement in a very short amount of time.

And how does it work? First, there are a few major, institutional lenders which have programs that allow us to arrange and refinance real mortgage loans at competitive interest rates for borrowers with credit scores under 500. These are real, federally and state regulated lenders. Ask your mortgage broker about these programs, and if he doesn't know what you're talking about, get a new broker.

The typical strategy is a credit improvement strategy, where the goal is to take enough cash out of your home to pay off as many of your past due, high interest, or high payment debts as possible. We recommend taking a little extra cash from closing if possible, or to use some of the savings from your lower overall payments so that you can enter stage two of the strategy, which is third party credit repair. A good quality credit repair agency should cost less than 300 dollars overall and can clean up your credit and remove a lot of delinquencies and other items which are negatively impacting your credit. Combined with all the truly harmful items which you've paid off with your debt consolidation refinance, you should be able to improve your credit score by 50, 100 points or even more. I have seen a client go from a 485 FICO and $65K in combined credit card and auto loan debt and a total monthly payment of over $2800 to a 610 credit score and a payment of $1900 per month in less than 4 months. How did that payment get so low? Once their credit score went over 600, we were able to qualify them for a new mortgage at a low interest rate, because now our friends had "good credit", and paid off the few remaining debts which they had by consolidating through refinance. Before the process, their average interest rate across all debts including home, cards and cars was nearly 22%, and afterwards, the average rate was under 9%.

There are some important limitations. If your credit score is under 500, you are generally limited to borrowing a maximum of 70% of the real market value of your home. This means if your house is worth $200,000 then you would be limited to a new loan of $140,000 or less. This limitation only applies to your first mortgage, so you if you currently have both a first and a second mortgage, and your first mortgage is less than 70% of the true market value of your home, you can still refinance and keep your existing second mortgage. Generally, you will need to have a first mortgage of at least $100,000 to qualify. It may be possible to borrow more than 70% of the value of your home but only if your current mortgage is not reporting on your credit report. Many programs will even allow you to use stated income to qualify!

We hope you find this information useful in reshaping your own financial future, and hope that you tune in for the next in this series of articles.

About the Author

Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage industry, advising clients on debt consolidation, refinancing & investor loans. Website: http://www.RefinanceOne.net

Sell Your Home Faster with Seller Financing

Seller financing opens your home up to an entirely new segment of prospective buyers, and the more buyers view your home, the quicker you will find that one qualified buyer. Specifically you will attract more buyers who don't want to or would have a problem getting a bank loan, or those who want a quicker closing or more flexible payment plans than banks offer. Such buyers include the self employed who may be great candidates but are not viewed as favorable by banks as are W-2 employees. Also those with credit blemishes, who may be going down the long road of credit repair. Real estate investors are another large group, since they may own many properties with mortgages, which makes it difficult to get another mortgage from a bank.

Banks typically take 30 days to close a loan, but with seller financing, YOU make the decision and this can be done much quicker, thereby removing a buyers contingencies faster and in effect leading to a much faster home sale. Regardless of whether you are selling FSBO (For Sale By Owner), or with a real estate agent, make sure you use "Seller Financing" in your marketing and advertising, be it in newspaper ads, flyers, or in the MLS description.

Other Ideas to Sell Your Home Faster
Number 1: PRICE IT RIGHT ! Not too high, not too low, check comparables and local agents to get the right number, if you are not getting any action after a week or two, you probably have it priced too high.

If you will be selling FSBO, use a flat rate MLS open listing. For under $500 you can get listed in MLS with no frills, check the newspaper or call agents to find one who offers this. It will give you much broader exposure and is advertising well spent. Also strongly consider offering a buyers agent commission of 2-4% depending on how quick you want to sell and how hot your local market is.

Put up lots of signs around the neighborhood, especially on weekends, hold regular open houses, prepare your house for sale, keep it neat & tidy and remove the clutter.

Sell Your Home for Full Price
1. Normally a seller will accept a lower price (below market) for an all cash no contingency fast closing.

2. It will sell for market price if the buyer needs 30-60days to close escrow and will need to qualify for a loan at a bank and do a home inspection.

3. You as a seller should charge even more (above market) if you will be giving seller financing terms, maybe 5-10% higher than Case 2, or more depending on the terms.

A Good Investment
Taking back a note can be a very good investment since you will be making interest on your money which is usually better than CD's, money market rates. In fact you can select the interest rate you want! This is especially appealing if you have no need for the money right now.

In fact it is such a good investment, that many investors buy seller carry-back notes. If you have no interest in holding a note, it is common for a home seller to carry-back a note and sell it at the same time as the home closing occurs. This is called a simultaneous closing.

We Buy Real Estate Notes and can facilitate simultaneous closings, call for more info on this. We can also help in setting the terms of the note so you get the best price.

Tax Benefits
When selling a home, under current tax law, if you lived in your home for 2 of the last 5 years, your capital gains will be exempt up to $250,000 (twice that if married). Otherwise, your capital gains will be taxed in the year that you collect the capital gains. If you will have significant taxable capital gains on your home sale, it may be very good for your tax situation to take back a seller carry-back note and spread your sale proceeds over several years, or postpone it for several years. Talk to your tax adviser.

Steps for Successful Seller Financing
1. Pull the prospective buyers credit report. You will need their permission, but always review a credit report on each borrower, it is a small expense.

2. Can they afford the home, job, income. If they cant afford it, or have a shaky job or income situation, a foreclosure will be much more likely.

3. Use a professional to draft the paperwork. Each state has many laws regarding real estate sales, contracts, and mortgages. Use an experienced attorney to draft the promissory note and mortgage or deed of trust.

4. Down payment - Sellers usually ask for 10-30% down payment to protect themselves in case the buyer stops making payments and the seller has to foreclose on the loan, and take the property back. The larger the down payment the more equity protection you as the seller have. The buyer will also consider how much money he has put down if he is in foreclosure and cant make the payments and wants to walk away from the house. Zero down is very little encouragement for a buyer, should he hit a rough patch.

5. 1st position or 2nd position - A first position note is much safer for the seller than a second position note.

6. Set the interest rate above current bank rates, to encourage the buyers to refinance down the road.

Also Read this Article: "Tips for Creating a Seller Carry-back Real Estate Note" at http://www.jmacfunding.com/articles.htm

Other Alternatives to Seller Financing

1. Land Contract / Contract to buy
2. Lease Option

This information can be useful to:
Home Sellers, Home Buyers, Note Buyers, Attorneys, Accountants, Financial Advisors, Real Estate Agents, Business Brokers.

Disclaimer:
I am not an attorney, nor a tax accountant, laws vary from state to state, and any advice implied by this paper should be checked with an attorney and/or tax adviser.

About the Author

James MacArthur is a real estate broker licensed in the State of California as well as an investor of real estate and debt instruments. We buy real estate notes and real estate contracts nationwide and make private and hard money loans on real estate in California. Feel free to contact me with any feedback, or if you are contemplating selling a real estate note.