Dont Lose HopeThere Is Bad Credit Financing

Friday, November 16th, 2012

There was a time, not all that long ago, when it was fairly simple to receive bad credit home loan financing. One of the major providers of such a service was Countrywide. Unfortunately, they were giving loans to high risk borrowers and eventually Bank of America took over. Countrywide were such big players in the market that their absence makes it more difficult to get bad credit home loan financing today.

But don’t lose hope. It is still possible to get this kind of financing, however it will probably take a bit more time to find what you’re looking for.

One of your first tasks is to figure out if you are really a subprime borrower or not. The quickest way to do this is by checking your credit report and finding out what your credit score is. A lot of people are happily surprised to discover their credit scores are higher than they assumed. Those with a credit score of 620 or better will most likely be able to get a traditional loan as opposed to bad credit home loan financing.

But even if you have a score that’s between 580 and 620, there is still something you can do, and that is raising your credit score. Go over your report and look for any inaccuracies that may be corrected. Also, be sure to pay all of your bills on time and try to bring down the total amount you owe all of your creditors. It may take a few months for your credit score to go up, but it will be worth it if it means getting better terms on your financing.

However, these tips may not be enough to get your score high enough, or it may be well below 580. You still may be able to get bad credit home loan financing, but you should be aware that it will come with a higher cost if you do get a loan. In the eyes of a lender, you are a higher risk, and that risk comes out of your pocket. This usually means paying a higher interest rate, and even one percentage point can add up to thousands of extra dollars over the life of your loan.

A good place to start looking is online. Go to your favorite search engine and search for “bad credit home loan financing” to see what’s out there. The internet also makes it easy to compare quotes from several lenders at the same time. You will have to enter some basic information, and then you will be presented with results from different companies. Being able to do a side by side comparison is convenient and will help you to see which offers fit in best with your current situation.

Finally, there is some good news even if you have to pay high rates for your bad credit home loan financing. If you are able to make all of your payments on time, and can improve your credit score over a period of two years, you can almost always renegotiate the terms of your agreement to make them more favorable to you.

Credit Score Agencies- The Three That Will Make Or Break

Thursday, November 15th, 2012

Credit Score Agencies- The Three That Will Make Or Break You

In the United States, there are three major credit score agencies, or credit reporting agencies; they are TransUnion, Equifax, and Experian. The three credit score agencies are responsible for gathering and providing information on individual consumers. Banks and other financial institutions, as well as landlords, utility companies, and even insurance agents, have come to rely heavily on the information that credit score agencies provide as a means to determine the creditworthiness of individuals. If you intend to ever purchase with credit, the credit score agencies are likely to have a direct influence on your lenders decision about whether or not to extend you credit and how much it will cost you to borrow money, i.e., what your interest rate will be.

Since the credit score agencies have a direct bearing on your financial life, it is important to make sure that you are careful to avoid behavior that will negatively affect your credit history, and it is equally important that you check your credit report periodically to ensure that the information is timely and accurate.

What types of transactions and credit information decreases your score? Having too much debt. The credit score agencies look at your income and how much debt you have; this is called your debt-to-income ratio, and if it is too much, your credit score will be lowered. Generally speaking, the credit score agencies and lenders like your total debt-to income to be no more than about thirty-six to thirty-eight percent. Even if you have been able to keep up with your payments and have made your payments on time, it is still considered important that sixty-two to sixty-four percent of your income is not involved in paying off loans.

What else decreases your credit score? Having late payments. If you have late payments reported to the credit score agencies, the natural conclusion is that you have difficulty meeting our monthly obligations. If that is the case, it just makes sense that lenders should be cautious about lending your more money.

What other information do the credit score agencies consider bad? Having a lot of account activity over a short period of time. If a lot of different companies are accessing your credit score at around the same time, it indicates that you are shopping around for credit and that you may be taking on too much debt. It is a red flag and can lower your credit rating. However, accessing your own credit report has no effect whatsoever on your credit score, so do not worry about that.

Do all three credit score agencies give you the same score? Not necessarily. Lenders realize this, so they generally use the average of all three scores. They may only use one agency, also, but that is usually not in your best interest, because what happens if they just happen to use the one that has incorrect data about you? Ever heard of Murphys Law? Usually, the reason for the different score is that not all three credit score agencies have the same data. Not every creditor reports everything to each agency. Check your report regularly and correct errors in a timely fashion; keeping a good credit rating in a harsh economy is tough enough without having mistakes in your file.

Financial Lenders

Wednesday, October 31st, 2012

Today, many people are taking advantage of record low interest rates to refinance their home. Still others are taking full advantage of a buyers market to buy their first home or move up to a bigger, nicer home. No matter which of these describes you, you will need to find good financial lenders.

We have all seen first hand just what loose lending practices have done to the overall economy. Unfortunately, as with most things, the pendulum is swinging far to the other side; financial lenders are getting even more strict about their rules when lending.

That doesn’t mean it is impossible to get a loan, but it will be a lot more challenging and if your credit is bad or you don’t have a down payment your odds of getting approved are not good at all.

The first thing you should do is try to clear up any credit issues you have long before you are even thinking of buying a home. The sooner you start to get your credit in shape, the better off you will be.

Next, start saving for the down payment. Having a significant down payment may make a less than stellar credit report a little more palatable for a lender.

When you have your affairs in order and are ready to start your search for a loan you will want to follow these steps:

1. Remember, not all lenders are created equal. You want to find one that offers the best combination of good rates and ethical lending practices.

And you don’t have to stay local either, if you don’t want to. Your first step should be to ask family, friends and your realtor for referrals.

Find the names of several lenders that meet all these criteria then start comparing rates and services to make your final pick.

2. When you are compiling your list of possible lenders make sure you check that all of them are in good standing with the Better Business Bureau and any state regulating organizations.

3. Now that you have a list of several reputable lenders it is time to start comparing rates. Interest rate is one of the important things to consider, but it is not the only thing to consider.

Closing costs as well as just how helpful the loan officer is are also things to consider.

Recently, a friend and her husband were buying their first home. They had a loan officer who was absolutely terrible!

She forgot to call and let them know when they needed to get paperwork in so they were often left scrambling at the last minute to find the paperwork and get it in one time.

So, don’t underestimate the importance of a loan officer who knows what they are doing and is up on everything.

When you are buying a home, finding the best financial lenders is as important as finding just the right house. Getting a great rate is very important, but it is not the only thing you should be taking into consideration.