Monday, July 30, 2018

Mortgages for Those with Bad Credit

Mortgages for those with bad credit are fascinating financial instruments. Not only do borrowers have to beware financially, they may risk exposure on other aspects of their lives. Are they reckless and accident prone?


Cost of a Bad Credit Rating

Folks with poor credit ratings can expect to pay as much as five times more in interest payments and fees over a life-time as compared to those with good credit ratings. When you think of all the things of modern life that are affected by credit ratings in one way or another, that is easy to understand:

 – Mortgage or home loans (mortgages for those with bad credit)
 – Small business loans
 – Personal loans
 – Vacation finance loans
 – Telephone and cell phone agreements
 – Cable and satellite TV
 – Prospective employment


Mortgages for Those with Bad Credit

A rose is a rose, but mortgages for those with bad credit can carry many names: non-conforming financial loan, credit impaired loans., specialty loans, sub-prime loans, etc. These loans are for borrowers with unique financial situations and they do not meet the regular financial benchmarks found with conventional loans. These mortgages or home loans require higher interest rates, and often heftier down payments.


Benefits of a Mortgage for Those with Bad Credit

Despite the high cost, mortgages for those with bad credit can bestow a wonderful benefit – improved credit ratings. If a borrower is able to maintain proper and timely payments as stipulated in the home loan or mortgage contract, he or she will see a marked improvement on their credit scores. This could pave the way for future loans granted with significant reductions in interest rates and lending fees.


Credit History vs. Debt-to-Income Ratio

Lenders who grant mortgages for those with bad credit use a different sort of criteria when they determine the eligibility of a borrower. They do look at credit histories but they will look more closely more closely at the debt-to-income ratio – how much is going out and how much is coming in on a monthly basis. If those figures look good and if there is the potential for the economic growth of the borrower, the lender tends to overlook past mistakes. But, since the borrower does have a record of not paying back loans on time, they are obliged to charge higher interest rates and fees to cover the risk.


Compared to Other Loans

Pay Day Loans and Cash Advance Loans, though their interest rates are already almost usurious, also consider the past credit performance of their borrowers. These lenders have realized solid profits due to these interest rates. But, the rates of interest and the fees are reflective of an individuals past financial reliability and therefore often understandable.


Withdrawing Carte Blanche

Some economists have argued that granting home loans or mortgages for those with bad credit is just another way to give money to people who cannot afford and allow unscrupulous lenders to prey on these high risk individuals, extracting fees and rates that would make a loan shark blush. As a result, new lending regulations have been set up to make getting a mortgage for those with bad credit somewhat more challenging.


Life Insurance – Bad Credit Means Bad Risk

Life insurance companies have developed a little skepticism about insuring individuals who have a mortgage for those with bad credit. They believe that reckless financial responsibility means reckless personal responsibility. More claims come from those with such loans. Insurers use this reasoning to substantiate increased payments for those with bad credit.


Auto Insurance – Bad Credit Means More Accidents

Automobile Insurance companies raise their insurance payments when underwriting holders of a mortgage for those with bad credit. And for good reason. Motorists with poor credit file more claims at the rate of 40% more than their good credit fellow motorists.


Back In The Groove

In spite of all this negative information, a home loan or mortgage for those with bad credit is a start to getting your financial life back into the right groove.



ABOUT THE AUTHOR 

Joycelyn Crawford is the author of this article. For more information about Easy Loans for Bad Credit and Easy Loans please visit her site http://www.easyloanforyou.com

Wednesday, July 18, 2018

Picking Mortgages You Can Manage Long-Term

Mortgages are long-term loans. Individuals obtain them when they wish to buy real estate and pay for it over a period of years. Most people will use a mortgage to purchase their first home because it can afford individuals the ability to get into a home sooner. Though many people often worry about the potential outcome of such an investment, if you do some research and planning in advance, you could find yourself in a much more affordable situation for the long-term. To protect your financial future, make the right decision now.

Picking the Right One

Everything goes into choosing from a range of mortgages to find the right one for your needs. Numerous factors will play a role in which of the many options is right for your needs. If you are considering buying a home or another type of real estate with it, you need to know what your options really are. Here are some of the most important factors to keep in mind.

- Determine which lenders provide the type of loan you need and are reputable providers. You will want to select a lender that will help you to qualify and has great customer service.

- Next, consider the amount you wish to borrow and the interest rate offered. The lender will likely determine, based on your credit score and income, how much of a loan they are willing to offer to you. However, you should determine if the interest rate is affordable enough for your needs. Negotiate it lower.

- Look at the term of the loan, too. When it comes to a mortgage, the longer you hold onto the loan, the more expensive it will be due to interest charges. However, the longer the loan is, the lower the monthly payment will be. It is up to you to determine which option is right for your needs.

- Determine if the loan will have a fixed rate or an adjustable rate. A fixed rate means the interest rate will remain the same over the course of the entire loan whereas an adjustable rate will change over time according to the movements of interest rates.

- Find out if you qualify for any discount programs or help in qualifying. FHA and VA loans, for example, are often great examples of ways to reduce what you have to put down. Getting the right mortgages for your investments is critical. Not doing so could cost you a great deal of money over course of your future. Take the time to compare lenders and loan offers until you find the option that fits your financial situation right now and into the future.



By: Antoinette Ayana 

ABOUT THE AUTHOR For information about mortgages birmingham residents have some experts to lean on. To get answers, go to http://mcgowinking.com