Category Archives: Home Loan

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.

The Risks and Benefits of Balloon Home Loans

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Category : Home Loan , Real Estate Loans , Residential Loans

Different situations call for different solutions. The ultimate goal is to find the type of loan that addresses personal demands. A balloon home loan is one that might just be the right choice for you.

A balloon home loan is a short-term mortgage with a fixed monthly payment and interest rate. The monthly fees are relatively small, and after a period of ten years or so, the remaining amount (which is comparably large, hence the name “balloon loan”) needs to be paid in one huge lump sum. If the loan matures and the debt cannot be settled, there is the option of refinancing the said amount. Refinancing in itself entails several risks, for the rates will now be set according to current interest rates, eventually leading to higher loan payments in the long run.

For many, obtaining a balloon home loan is a very precarious decision. Things may go smoothly for five years or so due to the small amounts to be paid, but as the loan matures, not everyone will be completely sure they will be able to pay the remaining balance in full. For example, if one obtains a five hundred thousand-dollar loan, and at the end of the term was only able to pay fifty thousand, it might come as a shock to know that four hundred fifty thousand dollars need to be paid in lump sum. It is for this reason that balloon loans do not appeal to all types of money borrowers.

This type of loan, however, can be advantageous to people who buy and sell homes, for instance. They are able to get huge sums of money in one single business transaction, thus the low rates are certainly to their benefit. Another advantage is the fixed-interest rates, which are found to be even lower than those of adjustable rate mortgages.

A good guiding principle would be the following: balloon homes are intended for short-term financing, thus if you are planning to sell your home before the loan matures, or you are certain of being able to pay the lump sum, obtaining a balloon home loan would be beneficial. If you plan to hold on to the property for a long period of time, there is a risk of refinancing, which might turn out to be a nightmare due to higher interest rates. An even graver consequence is that you might not be able to pay the new loan, and end up losing your home and property entirely. Thus if you’re looking for a more stable, long-term mortgage loan, it would be better to seek other types of home loans. Important things to keep in mind when applying for a balloon home loan are the interest rates, the due date of the lump sum, the outstanding balance, the option of refinancing, and effective management of installment payments.

Home Loans: What Are the Steps to Do If Your Home Loan Application Is Rejected?

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Category : Commercial Loans , Home Loan , Real Estate Loans , Residential Loans

Before submitting the application, we know for a fact that there is a high percentage of being rejected. The truth hits us hard when it happens. People who have been rejected may give up to this point.

If you’re application was rejected what will you do next?

At this point we finally grasp what our lenders are trying to say to us which is the percentage of failing is indeed much larger than the approval. The next move here is to find out where we failed.

Right now you have to think whether you want the loan or not. You are at a crossroad.

You have to think things through this time. Gauge if you really want to move or just give up. Set things in to perspective and do not waste time.

If you decide to go on then you have to set a new plan this time. A plan that is formed to get better results. In order to do that you have to know where you failed. Asking your lender on this matter is a good start.

To help you further, below are good tips to get you going.

Cheaper properties can help your loan get approved:

When your application is for a property that’s too expensive then lenders will reject that application. You have to get a property that is much suitable for you. Shop for cheaper properties, that’s the key!

Your chances of getting approved is base on your ability to pay your dues. If the lender sees that you can’t afford the loan then obviously you will be denied. So weigh your plans and go for something that you can handle.

Think and see if things are better and then that’s the time you’ll decide.

If the banks says that the property is no good then find another affordable one.

If a house and lot is too much then try out the condominiums or town houses.

Ask the bank to evaluate your application again:

If you doubt the results then have someone inside the agency to re-evaluate your application. This can be done if you just ask nicely.

Re-evaluation starts with the applicant writing the agency a letter. This letter must be good and true since your application’s future relies on it. You have to set everything straight. Do not set excuses and just tell the whole story as it is. In the event that something bad happened make sure it’s real and a one time event.

Right now is the best time to know that your re-evaluation can go smoother when you have good credit scores.

Most of the time things do not go the way we want it in a loan application. The odds are against us. So when we get rejected we should remember that we shouldn’t give up. Push forward and set a better plan. Ask for another evaluation. Get things done.

Factors to Consider Before Getting a Hard Money Lender

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Category : Hard Money Loans , Home Loan , Real Estate Loans , Residential Loans

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.

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