Monthly Archives: August 2012

Factors to Consider Before Getting a Hard Money Lender

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Category : Hard Money Loans , Home Loan

While the hard money lender cannot be compared to a bank, you can place certain measures into place in order to ensure you don’t get duped when getting a loan from them. This is a non-traditional loan and it comes in handy when you need to get private loans. For the purpose of ensuring you make the right choices, it is advisable to consider the following important factors. Experience: Find out the duration the lender has been in the market and the number of successful deals they have closed. In this case, you can look at their expertise and the type of customer feedback they have before making your decision. Industry connections: This refers to the investors and lenders they work for. In this case, it is important to ensure that they are well connected and they have the purpose and tools needed to ensure you access your cash without any difficulty. Keep in mind that those with many connections are able to get ready cash fast and this ensures that the job is completed within a short duration. You need to look at your local estate market. If it is performing poorly, there is the possibility that the rate for the cash is going to be higher as well. Always take time to carry out thorough research your local market keenly in order to ensure you make a decision that is in your best interest. References: In this case, it is imperative to ensure they are competent and what better way to confirm this than talking to people who have used the services before you. They will give you an account of personal experience and this will ensure that you get a lender that offers a deal that works well for your needs. If need be, make sure that you carry extensive and thorough research. Do not stop until you are certain that the choice you get is in your best interest. Prepayment penalties: Before getting private loans, it is important to ensure you get a clear picture of the prepayment penalties. Note that this depending on the lender selected, you might be expected to pay this or not. Prepayment penalty refers to the fee you incur incase you don’t make your payment as agreed. For the purpose of ensuring that you are not subjected to any unpleasant surprises, it is important to confirm this amount with the hard money lender. In most cases, it is advisable to settle with one that does not charge such fees. Always, before seeking to use these services, it is also advisable to ask them if they have state licenses. Every lender is supposed to have one and if this is not the case, then don’t use the services.

Get Home Loans With Bad Credit: Online Lenders Can Help You Succeed

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Category : Home Loan , Real Estate Loans , Residential Loans

For many citizens, the chance to own a home is not something to pass up. Owning a home is the best way to build wealth over time and a true measure of a person’s accomplishments. However finding home loans with bad credit may make this chance more elusive than ever. For borrowers with poor credit, home loans may seem like just another dream. However, there are ways to get the mortgage loan you need through online lenders who specialize in high risk lending.

Credit Is Still Important

Many people wonder why a simple three-digit score is so important when trying to buy a home. It’s just a number after all, right? Wrong. The Fair Isaac Corp. (shortened as FICO) developed the credit scoring system as a means to help lenders assess the likelihood of default on loans. The system take several aspects of your credit: your asset to debt ratio, your past history of repayments, bankruptcies, foreclosures, etc. and uses that to generate a score that tells lenders a lot about you with little fuss.

Basically, the point of a credit score is to serve as a short cut for borrower evaluation. Bad credit means that the borrower has had problems with money in the past and may have problems in the future. Therefore, when looking for a home loan, poor credit is an important element that a lender will use to assess whether or not you will be able and willing to repay the loan on time and in good standing. If you do not do this, the lender loses money.

Lenders Willing to Take the Risk

Even if you have reformed bad habits or, worse, your poor credit score is a result of factors out of your control (such as lay-offs or medical bills) most traditional lenders will still consider you a rick when considering you for a home loan. With bad credit, no matter the reason for that poor credit, you are at a disadvantage with most lenders.

There are clear exceptions to this rule, however. Many lenders who operate online are willing to work with people whose credit scores are lower than ideal. Why? Many of these lenders understand that in cases where bad credit is a thing of the past, a second (or even third) chance is warranted. These lenders will give home loans to those with bad credit because they believe you have the ability and willpower to succeed.

There Are Still Penalties

This does not mean that you are on even playing ground with other borrowers however. Because of your bad credit, home loans will come with certain penalties or other circumstances that will offset the risk your bad credit creates. Principally, this means that your interest rate will be higher than those low rates you see advertised all the time. There may also be certain fees for late or missed payments that are higher than those on traditional loans. It is important to read all the fine print on your final loan papers in order to understand all of these circumstances.

The good news is that borrowers with bad credit can still get home loans. With poor credit, it is easy to get discouraged, but it is not necessary. Consider all the options in front of you and start your search today!

VA Home Loans With Bad Credit: Special Qualifications and Tips

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Category : Home Loan , Real Estate Loans , Residential Loans

Serving the country as a member of the armed forces comes with many benefits. The 1944 Serviceman’s Readjustment Act, which many also know by the term GI Bill, was created to help armed forces veterans to get ahead after their service time has ended. One such benefit offered by the GI Bill is VA home loan assistance. This program allows vets to purchase a home with a low or minimal down payment. The VA will guarantee 25% of the loan instead. Also, those with bad credit are also able to find relief through VA loans.

Get a VA Loan: Meeting the Qualifications

The benefit of the VA home loan received through the Serviceman’s Readjustment Act (GI Bill) is that there is a guarantee from the department of Veteran’s Affairs (VA). This guarantee eliminates much of the risk associated with bad credit loans or low down payments. You can get a VA home loan with bad credit. However there are specific criteria that you need to meet as well. These qualifications include the following:

• No history of loan default within the last twelve months. Defaults in the distant past, though considered, can be disregarded if you have proven that you have reformed from your past mistakes.

• No bankruptcies on file in the past two years. Again, a bankruptcy on record will matter, but if you have made changes and allowed at least two years to pass, you can still get a VA home loan.

• Proof of current, gainful employment with a steady and reliable income. You need to display that you have the ability to pay for the home loan you seek.

Disabled Veterans

Armed service veterans who are currently disabled and receiving benefits due to their disability may still qualify for VA home loans with bad credit. This is because there are special additional programs that are offered for disabled vets. By speaking with a VA loan professional, you can see if you are able to get a VA loan with bad credit as a disabled veteran.

Improving Your Credit Score

Among the most important steps to take before applying for VA loans is making changes in your personal financial habits in order to increase the credit score you currently have. Simple steps that you can take in order to achieve this include consolidating debts and setting a clear budget to follow each month. Also, make sure that you have each month’s payments clearly marked on your calendar in order to avoid late payments that may make a bad credit score go down even more.

Hard Money Loans-Easy To Borrow

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Category : Hard Money Loans , Real Estate Loans

Hard money loans are the amount being borrowed to solve some urgent financial problems. The term hard signifies it’s quite Herculean to obtain because these loans are not provided by banks or financial institutions rather they are disbursed by private financial groups or lenders known as hard moneylenders. Hard can also be interpreted in different manner as there is high upfront cost involved and exorbitant interest rates are being charged. These loans also have high origination fees and cost more than an average mortgage (in some cases going as high as twice that of average mortgage).

Hard money loan is generally explored as the last resort. It should be understood like if one is willing to sale his/her business venture or the property and he/she thinks with a little bit of renovation and repairs the money generated can be quite high then hard money loans can be the best suited option for him/her. All he needs to do is to obtain the loan utilize it make some extra money and return it.

The uniqueness of hard money loans lie in their various characteristics like they have private lending sources. They come with short interest term of one to three years they charge upfront fee on closing before three months of the due date that is quite astronomical. There is limited number of debt covenants and they are shorter in duration. Moreover the failure in repayments results in the sale of the assets to nullify the debt.

Hard money comes in forms like hard money business loans or residential hard money loans. The hard money loans are usually secured by real estates of commercial viability. Hard money borrowers get the fund based on the estimated value of the commercial or residential real estate. The lenders are interested in money generating properties such as apartments, shopping malls, office buildings, hotels, hospitals and so on. However potent income generating activities like land acquisitions, bankruptcies are also seen with interest.

People who have been turned down the mortgages by the financial institutions because of various reasons like having a poor credit history, non competence to pay as they lack in desired income etc. also look upon the hard money loans as their saviors. Hard money loans are also sought by persons who are falling behind the repayments of their mortgage or fear the foreclosures.

The investors are lured by the typically high return on their amount which banks fail to provide them. So investing in hard money loans to borrowers having equity of 30-40% in the property seems to be a better proposition to them. These loans are given on the appraised value of the commercial property unlike traditional bank criteria which seek too many documented proofs like credit card scores, tax returns and income statement of the borrowers. Lesser paper work and lesser verifications make the procedure to obtain these loans very brisk.

Prevent Default In Debt Repayment Through Home Loan Refinancing

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Category : Home Loan , Real Estate Loans , Residential Loans

The global crisis had caused financial disaster to a lot of people. There were those who found bankruptcy as the only recourse to start fresh and free from bad debts. You too had experienced the difficult situation and you are having trouble in paying your home loan. Upon consultation with a financial expert, the best advice is to have your home loan refinanced. This can lead to lower mortgage rates that eventually can bring down the monthly amortizations to your debt.

Refinancing or loan restructuring as some may call it had become easier because of the low mortgage rates imposed on the home loan. The best way to achieve a lower amortization is to find a bank or lending institution that can offer lower mortgage rates for such refinancing. A small drop in the interest rate can already bring substantial decrease in your monthly amortizations. Your savings can help you in the sustenance of your monthly household expenses. This will further prevent you from defaulting in your monthly payment.

The positive effect of the refinanced home loan will be felt once the mortgage rates are lowered. However, there are limits to the refinancing of any home mortgage. You can only request for restructuring for a specified number of times – not very frequently. Some may think of refinancing as a strategy to keep bringing down the interest rate. Application and approval of this debt relief is subject to certain terms and conditions.

With refinancing, the mortgage rate of your debt will surely be reduced. However, you have to satisfy certain conditions in order to merit the modification in your house liability. The first is your credit score. This should be perfect meaning that you have no bad credit record. So – if you are thinking of applying for this relief, examine your other liabilities. The manner by which you handle your credit cards is paramount in order to have a perfect credit rating.

You will also need a good financial broker. This is the person that will prepare the justifications for the grant of a refinanced home loan with lower mortgage rates. This is an expert who knows how to stress the good points in you. You have to be credible and the financial broker can guide you on how to be one. In some instances these brokers have the power to negotiate for lower rates. A broker has knowledge of the different lenders who are more lenient and who can give a better packaged deal.

Getting off the tough financial condition you are currently is highly possible. If you have an existing home loan, you can have this refinanced such that lower mortgage rates can be imposed on the loan balance. Even a marginal decrease will be a big factor in order to bring down the cost of debt repayment. This is a debt relief that will be subject to your perfect credit rating and employment of a professional financial broker. Even if you can be granted home loan refinancing you cannot do this several times – not over and over in order to continue decreasing your mortgage rates and monthly amortizations.

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