Top 10 Things to Consider on Home Loans

Here are our Top 10 most important things to consider when shopping for a Home Loan, Equity Line of Credit, or Refinance, courtesy of Loans-Directory.Org:

  1. Down-Payment
  2. Fixed Versus Adjustable Rate
  3. APR
  4. Loan Types
  5. Loan Amount Qualification, Income
  6. Loan Amount Qualification, Expenses
  7. Employment and Credit History
  8. Points
  9. Sub-Prime Loans
  10. Short-Forms

1. Down-Payment – As a general rule of thumb, lenders will be seeking contribution from you of around 3% to 6% of the total loan value. This can be negotiable, and there are many loan packages available.

2. Fixed versus Adjustable – The two most common loan products available for home mortgages are fixed rate versus adjustable rate.

Fixed rate means that you agree on an APR (annual percentage rate) that does not change through the life of the loan, whereas, an Adjustable Rate Mortgage, better known as an ARM, means that rates and monthly payments can change, often tied to the U.S. Government Treasury Bills or some other form of “index”, with the frequency of change dependent upon the terms of the loan.

Deciding on which way to go involves many variables. We suggest that you start by examining the fixed rate products available on the market. They are by far the most popular, and arguably with the least amount of risk. After evaluating several preliminary loan offers (quotes) for fixed rate mortgages, you can then venture into the world of ARM’s to see if one of these products may be right for you. But, proceed with caution, and understand all the risks, alongside any potential benefits.

3. APR – APR, better known as the annual percentage rate, aka: “rate”, is arguably the most important consideration you must examine when looking for a loan. The APR includes principle, interest, “points”, fees, PMI (Mortgage insurance), and other costs associated with the loan. While all costs and terms are significant and affect the bottom line, we suggest that shopping rate is a very good starting point.

4. Loan Types: There are several standard loan products to look for, including 30 year fixed, 15 year fixed, bi-weekly mortgages, 1 month ARM’s, 5 year fixed ARM’s, 2nd Fixed, ARM’s with a provision to convert after 5 years, lender buydowns, and discounted mortgages.

We think the best place to start, is to obtain quotes for a 30 year fixed rate loan, and then go from there. 30 year fixed rate loans generally produce the lowest monthly payments for fixed rate products, and they are relatively safe. Once you know where you stand with a 30 year fixed, after obtaining quotes from several lending institutions, then you can consider the possibility of exploring more exotic loan products. At this juncture, you will want to consult with those you trust, for good, solid advice and feedback on risk versus reward.

5. Loan Amount Qualification, Income: This can vary widely depending on you, your lender, and many other variables. However, as a rule of thumb, look at 2 to 2 ½ times your current household income, as a baseline to determine how much you can afford to borrow.

6. Loan Amount Qualification, Expenses: This is another broad category that varies from one lending institution to the next. However, there are two general factors to look at, and they are Housing Expenses (such as mortgage, property taxes, and insurance), and long-term debt (which can include credit cards, auto loans, etc.).

First, add all your expenses together. As a rule of thumb, you will want your expenses to not exceed 33% to 36% of your gross household income.

Second, examine your housing expenses only. As a rule of thumb, you’ll want these expenses to not exceed 25% to 28% of your gross household income.

7. Employment and Credit History: Lenders generally want to take a look at your employment history so that they can see a pattern of stability and income. Lenders generally also want to take a look at your credit history, so that they can see a pattern of borrowing and repayment in your past. Lenders cannot discriminate and must use this information solely for the purpose of considering your ability to repay a loan. Also, many loan products are available for all kinds of customers, with varied financial backgrounds and histories.

8. Points: Points are one of the primary fees charged on the loan, and they represent the profit earned by the lending institution. One point represents one percent of the total loan amount, and points are usually tax-deductible (along with the interest paid on the loan). They are broken down into two basic types:

Origination Points – Origination Points are the fees charged by the lender, and represents their gross profit.

Discount Points – Discount Points are most often charged in association with a lowered interest rate. In other words, the Discount Points represents a dollar amount, as a fee for giving the borrower a lowered APR (lower than what the lender might otherwise charge).

9. Sub-Prime Loans: Sub-Prime Loans consist of loan products designed for customers with challenging credit and financial backgrounds, or, customers that are looking to re-establish credit. They can be significantly higher then the prime lending rate, with less favorable terms (Often times, the loans are for the short-term, such as 2 to 3 years). However, they do offer a venue for certain individuals, and they can allow customers to re-establish credit, or buy new homes prior to cleaning up a credit history, etc.

For some of you, this avenue may offer exactly what you’re looking for. It’s important to know that lenders who specialize in sub-prime loans are out there and want to earn your business. However, we advise that you proceed with caution. Be sure to gather sound advice from trusted friends and professionals, and understand all the risks versus rewards, prior to signing on the dotted line.

10. Short-Forms: The most important thing you can do as a consumer of loan products is to shop around and get several preliminary loan quotes for your consideration.

These are no risk, no obligation, preliminary loan offers. They take 30 seconds to 2 minutes to complete, they require no personal or confidential disclosure on your part, and they require no commitment from you.

We suggest that you obtain 3 or 4 offers. You can then examine and compare the terms, rate, fees, and all other pertinent information about the loan product, and the lender, at your leisure and in the comfort of your own home.

Loans-Directory.Org (http://www.loans-directory.org/) has categorized hundreds of online services that you can explore. You can also go to any search engine and find them from there. Look for a “privacy policy” on their website, as well as short, simple application forms that make sense and are relatively easy and quick for you to complete.

Also, take a quick look at the current interest rate for 30 year fixed loans, as well as the 6 month trend graph. We have set up a free webpage with this information, or you can find many graphs and charts via your favorite search engine.

We’ve enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, but never turn your back on your own common sense.

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Disclaimer: Disclaimer: Statements and opinions expressed in the articles, reviews and other materials herein are those of the authors. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. The author will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.



Source by Tom Levine

Do You Qualify for a VA Loan?

We all know that most of us need a mortgage in order to buy a house. We go to a lender and complete all necessary paperwork and then we can purchase the house, paying back the mortgage money that was leant to us in monthly installments.

A VA loan, then is a mortgage loan that is guaranteed by the US government and for the use of American vets, military members, currently serving members and select surviving spouses of members. Veterans can then use this mortgage to purchase a single family home or a condominium, multi unit properties, manufactured homes or a new construction property.

While it the office of Veterans Affairs that financially guarantees the loans that qualify and who set the rules for who can qualify and when, and makes the guidelines the money doesn’t actually come from the government, but instead from any qualifying lender (bank or other financial institution).

The intention of these VA Loans is to supply funding for a home for service members and their families without the worry of having to come up with a down payment like you do with other mortgages. If you don’t have to come up with a down payment, then more of your money can go towards paying back the mortgage and that’s the idea of the loan.

The original act passed Congress back in 1944, after World War II and since then over 20 million VA home loans have been issued. After a few amendments over the years, the scheme has been expanded and increased to allow more service members to qualify and include more housing options for those members.

If you qualify for a VA loan, you are allowed 103.3% financing without private mortgage insurance which is a huge savings over a traditional mortgage. You can also get 20% for a second mortgage and up to $6000 for energy efficient improvements for your home. Furthermore, a VA funding fee of between 0 and 3.3% can be added on, again, a lot better than a traditional mortgage.

Being in the military is not an easy job, and it’s nice to know that once you are a veteran there is help out there for financing your property. Whether you are still serving, are a proud vet of the spouse of a fallen hero, the government has you covered with perks when it comes to financing your home.



Source by Amanda J Hales

Financing Your Home: Types of Mortgage Loans

Financing a home is a famously tricky process, fraught with complexities and risks that are difficult to detect from the outset. During real estate booms, lenders are prone to offer homebuyers fancy payment programs with strange terms in hopes of enticing them. This kind of maneuvering helped spur the famous real estate meltdown in 2008 that led to economic recession and financial panic throughout the U.S. While lenders have gotten smarter and safer since then, it still requires a ton of patience and care to find the right financing plan for you and your family. Let’s look at three of the most common mortgage loans that you may want to consider when buying a home.

1. Fixed-Interest Plans

A fixed-rate home loan means that your interest figure remains constant for the entire duration that you pay it back. This type of loan is “amortized” over its lifespan. This means that lenders take the principal amount of your loan, add it to the interest that will accrue, and then split this total sum evenly into monthly payments. In most cases, these payment plans are “front-loaded,” which means that a higher percentage of your early payments go toward the interest sum than toward the principal. Fixed loans are most commonly paid over a thirty-year period, but it takes some careful consideration to determine the right balance between loan duration and interest. You may be attracted to a forty-year payoff with a lower rate, only to find that this program will be more expensive in the long run.

2. Adjustable-Rate Plans

Unlike fixed plans, adjustable-rate mortgage loans, or ARMs, have rates that change periodically. Though this may sound unnecessarily complex, ARMs can be very attractive depending on your personal finances and the borrowing market’s climate. If fixed loan options have especially high rates, ARMs can be the best way to save. Lenders create these plans based on an index number, which is essentially a measure of money’s current value. Since currency is susceptible to inflation, ARMs allow lenders to respond to this volatility by increasing the figure by a specified margin after a certain period of time. For example, you may agree to an ARM with a low rate that remains fixed for the first five years. After this period, the lender may up the figure by a few percentage points. Don’t worry: ARMs always involve a cap, which prevents rates from jumping too high.

3. Interest-Only Plans

Interest-only mortgage loans are usually the preference of homebuyers who borrow on a tighter budget. They are unique because they allow the borrower to make payments only towards the interest for the first few years. This allows buyers to make lower payments at first. However, the figure may be adjusted after this first period, leaving the borrower to start making payments. In this way, these plans are hybrids of fixed and adjustable mortgages.

Mortgaging your home can be frustrating and difficult, but knowing these basics before you sign anything will help you immensely. Look at your financial profile and where you see your life heading in the coming years, and find the program that most suits your needs.



Source by Andrew Stratton

Personal Loans

The financial crisis or the economic downturn of 2008 saw not only the bottom fall out of the real estate market but the high-interest rates also had its impact on the creditworthiness of several other people outside the housing loan / mortgage finance segment. Personal debts also increased multi-fold with people looking at increased payouts primarily from payouts towards credit card outstanding amounts. In addition, rising costs of utilities, retail shopping and medical bills forced many to borrow to pay their bills. The resulting situation was a high degree of unsecured debts which left even many high-earning individuals in dire straits as losses accumulated and assets fell short of their market value.

There are many debt relief options to help deal with unsecured debts; one of them is availing a Debt Solidification Loan. But understanding what a debt Solidification loan provides in terms on debt relief is very important so as to analyze all the options.

A debt Solidification loan is only a part of the debt relief process – other options include Debt Settlement and at the worst level, Bankruptcy.

Let’s take a look at what a debt Solidification loan involves.

Typically, it means combining or putting together all high-interest credit card dues into a much lower interest loan payout. It can also mean ‘Solidification’ of all credit card dues into a more structured and manageable payout schedule to a credit counseling agency, which in turn dispenses payments to individual creditors.

Debt Settlement is another option of debt relief where there is the hope of negotiating outstanding payments with creditors to arrive at a substantially less payout than the actual debt. These debt relief methods are providing alternate means to declaring a person ‘bankrupt’ which has a damaging and devastating impact on personal credit in the long-term.

Hence, debt Solidification represents a wide variety of debt relief options; however, unlike a debt Solidification loan, it involves ‘Solidification of all debts’, including unsecured debts, into an affordable and manageable repayment monthly payout scheme, details of which are advised by a credit counseling agency. This kind of debt Solidification is sometimes referred to as a DMP or a Debt Management Plan.

A Debt Management Plan is seen as a smart move to get out of bad debts; however, going in for a debt Solidification loan requires the person availing the loan to put up some kind of collateral as risk-insurance. This effectively means that in case of default on repayment, the collateral may simply slip out of hand.

A personal loan is just what it means. It is a personal loan taken at a low-interest, long-term schedule to repay old or bad debts, typically credit card outstanding dues. In short, it means paying off ‘old debts with a new loan’. For consumers who cannot be counted to exercise discipline in curbing credit card expenditure, this simply leads to further outstanding and overstretched payments, sometimes defaulting again eventually leading to a worse debt scenario.

Comparison between a personal loan and a debt Solidification loan can provide varying results; what works for one may not work for the other. However, where there is involvement of a credit counseling agency, the debt repayments are consolidated into an affordable repayment plan and a planned schedule is maintained.



Source by Urvi Tandon

How To Find More Home Mortgage Refinancing Clients

I remember before the 2008 Housing Crash that nearly everyone who didn’t have a job was suddenly a mortgage broker. Everyone wanted to get in on all the home owners wanting to refinance. Buyers were everywhere, and everyone was making money until they weren’t – and we all know what happened after that. Now we see the Federal Reserve is raising interest rates, and it is starting to take a huge bite out of the mortgage business.

What can you do to keep your home mortgage business in the green? How can you continue to find people who still want to re-fi now at the higher rates? Believe it or not, it’s not impossible – you just need to focus on your marketing and take it to a higher level. Below is a sample marketing piece to look at and think on. Great for email marketing, webpage, social media, brochure, mailing piece or 2-minute radio spot.

— — — — —

Refinancing

Is your current mortgage interest rate too high? Would you like to pull some equity out of your home for your kid’s college, to buy a car, for renovation, or to pay off other debt? There are many reasons to refinance with need being specific to the borrower’s financial situation and desires.

Re-Fi’s can often be stressful, as lenders want to know all about you and your financial wherewithal. But it doesn’t have to be a hardship. This is why we are upfront in explaining all the needed pieces of verification before you start. This way there are no real surprises at the last minute, which is a common complaint from borrowers refinancing their properties. Often a lender might need an additional piece of verification to shore up any doubt, but most of this is predictable.

You see, before loan-committees meet there is someone who goes through all the paperwork prior to presentation, these quality and paperwork masters know what’s going to fly and what isn’t. Sometimes the loan committee might say, “Okay, if we have verification of this, then it’s a go, and we all sign off on the deal.” Remember every institution or organization has their own bureaucratic processes, and this is how things work. If you prove you are a reduced risk, you get the best rate. It’s all about:

1. Credit Score

2. Income

3. Debt

4. Personal Funds

We have been doing this long enough (30-years) to predict such potential eventualities. Yes, when it comes to re-fi’s experience pays off.

We can help you with streamline refinancing through FHA or the VA if you are a veteran. The USDA also offers a refinance program. If you want to renovate your existing home, you might refinance or get a second mortgage. If you want to buy a home and renovate it – fixing it up, you might qualify for the FHA 203(k) Rehab Loan program.

You have options, and we have solutions – we get it – and we’ll get the deal done for you.

— — — — —

Why not tinker a little with your marketing communication strategy, consider how you can get your message out, before you end up like many of your competition – out-of-business. Please think on all this.



Source by Lance Winslow

Hot Tips For Getting The Best Mortgage Loans

A mortgage loan is one of the most basic types of loans you can get from a bank, and meets one of the most basic of human needs, namely shelter. To this end, it is not quite as demanding as getting loans geared towards other things, especially luxury items. Still, because of the sheer amount of money involved in getting a housing loan, you should do your homework first before applying for a mortgage loan to keep yourself from biting off more than you can chew. Here are a few tips to remember when considering a mortgage loan.

Shop for the House Before Applying for the Loan – like with most loans, it’s best to get an idea of what you want before applying for the loan itself. That way, when you actually present your case to the one approving your loan, you can give more solid evidence of what you’re intending to do with the money you’re borrowing. To this end, though, you should shop within your means. Only consider houses that are within your budget, and situated within neighborhoods that are within your financial capacity as well. While mortgage loans are also available for people who are intending to finance the actual building of a house from the ground up, it’s easier to get a loan when you shop for a house that’s FSBO (For Sale By Owner).

Keep your Credit History and Financial Capacity in Mind – this will be a major consideration of the person approving your mortgage loan. Bad credit history ratings or unemployment are sure fire snags that will weigh heavily against your favor when applying for a mortgage loan. Make sure that you are financially stable and can back up the loan you’re going for, with enough income to cover the interest rate as well as the monthly balance of the mortgage given it’s deadline to finish paying it.

Use a Mortgage Loan Calculator and Consider Different Loan Packages – not all loans for mortgage are created equal. Some banks offer higher interest rates than others, and there are those that offer longer terms of payment for larger initial downpayments. Still others allow for additional payments on the mortgage aside from the monthly due and interest, and these additional payments are applied directly towards lessening the overall sum of the loan’s principal. With all the different packages available, choose one that you can work well with, and to help you with your calculations download a mortgage loan calculator program from the internet. This is an invaluable tool for keeping track of your mortgage.

Consider Using an Escrow – escrow accounts work in the favor of the lending institution; as such, getting one helps improve your odds of getting a base mortgage loan approved. An escrow account is essentially a separate account that you open that handles the taxes and insurance payments on your house for you. This favors the lender somewhat because escrow accounts are tied up with your mortgage, meaning the lender gets an additional bank account in your name. However, the advantage of an escrow account for the lendee is that it acts as a buffer for the additional payments that he or she would normally have to worry about aside from mortgage. With an escrow account, all payments are sent to the lender, and they take care of the paperwork and housing related bills for you.

Consider Investment Property Financing – if, and only if, you’re getting a mortgage loan to buy a house NOT to live in, but rather as an investment to resell later, you can apply for Investment Property Financing. The mortgage loan you get from this treats the property you’re buying as a commodity that you will eventually be reselling. The mortgage terms for this are different and a bit more lenient than that of a regular housing loan. Still, even if you intend to live in the house you’re buying, if you know that it’s going to be a temporary residence that you’ll be reselling in a decade or less, you should still be able to work it as an Investment Property loan rather than a straight Housing Loan.

Get Mortgage Protection Insurance – finally, be sure to get mortgage protection insurance. This will increase the monthly payments you have to make, but it has quite a few advantages. For example, if you happen to have only one primary breadwinner in the house that suddenly becomes unemployed, if the insurance policy ties in to that breadwinner as the sole person responsible for the mortgage payments, the insurance company will be liable to pay off the remainder of the mortgage off on your behalf. Tying a mortgage protection insurance plan into an escrow account helps keep things tidy, and while you may wind up paying a bit more monthly this way, the benefits far outweigh the extra cost.



Source by Pat Caymus

Do You Need A High-Risk Home Loan?

While high-risk home loans have gotten a bad name because of the latest meltdown of America’s economy, they do have a good side to them. The fact is that not all high-risk loans are risky because of poor credit. You them are classified as risky simply because the borrower has no financial history. The great thing about these instruments is that they give risky borrowers an opportunity to repair any they may have, and they can start establishing financial histories for those who have none.

The best approach for obtaining one of these high-risk loans is to plan on refinancing the mortgage in a few years when credit scores improve. This will immediately reduce the current interest rate and lower the monthly payment. You have to realize, that these loans can have some very steep initial interest rates. The best thing you can do is to get a copy of your credit report and talk to a financial counselor to get an idea as to when your score may improve. By doing this, you will be able to approximate when to expect your monthly payments to go down.

Of course, any bankruptcies or other major credit problems could be quite a big hurdle to jump over when obtaining a home loan. However there are some high-risk loans out there that are willing to relax some their garments under specific circumstances. There are also specific actions that will reward can take to obtain one of these loans. It is a good idea to check with your personal bank or credit union to see where you stand. Also, do not underestimate the resourcefulness of your Realtor as they have solved many of these types of problems before. While this may be a big hassle, researching mortgage companies will take some time and resources, but we usually pay off big in the end.



Source by Charlie Edgar

FHA Home Loans vs Conventional Home Loans

Before you ask your financial institution for a standard, conventional home loan, consider asking about a Federal Housing Administration (FHA) loan instead. In this article we’ll cover the basics of an FHA loan, why you should ask for one and how they measure up to conventional home loans. Keep reading to learn more.

What is an FHA home loan?

An FHA home loan is still issued by a private financial provider, but it’s insured by the Federal Housing Administration (FHA). Essentially, this provides the lender with greater security and you with lower monthly payments.

Why should I ask for an FHA loan instead of a conventional loan?

1. It’s easier to qualify for an FHA loan. Because the mortgage is insured by the FHA and the U.S. Department of Housing and Urban Development, lenders are more likely to issue the loan.

2. You can still qualify with poor credit. Even with past credit problems like a bankruptcy, an FHA loan is easier to qualify for than a conventional mortgage.

3. A lower down payment. An FHA loan only asks for a 3% down payment, which is significantly lower than some banks’ requirements of 10-20%.

4. The loan costs less in the long term than a conventional loan. Because the FHA can offer more competitive interest rates, you’ll often receive lower rates which will save you a lot of money over the term of your loan.

5. FHA offers foreclosure protection. Unlike many lending institutions, the FHA doesn’t want to see your mortgage foreclosed. So, they have a number of programs designed to help homeowners who are in trouble. This can be a great resource if you hit hard times.

6. Energy efficiency credits. The FHA allows prospective homeowners to include the cost of energy efficiency upgrades into their mortgage, meaning you can get extra cash to make your new home more energy efficient.

How do I qualify for an FHA loan?

1. You must meet the basic FHA credit rating requirements. While these are lower than most banks and lending institutions that offer conventional loans, you’ll still be subject to a credit check.

2. Your mortgage must not exceed the maximum amount available in your county. On their web site at http://www.hud.gov, the U.S. Department of Housing and Urban Development maintains a list of maximum amounts sorted by county.

3. The property you’re buying must not exceed four units.

4. The potential property must be appraised and inspected. You can subtract the cost for this from your down payment requirements.

All in all, an FHA loan works out to a much better borrower’s deal than a conventional loan.



Source by Jack Burnette

The Main Advantages of Refinancing Your Home

Many people are hearing about refinancing their home loan these days. Whether it is at their bank, on a television ad, or maybe they have overheard others talking about it. Either way, refinancing a home mortgage now is a very popular option for many homeowners due to favorable interest rates and a recovering housing market. Many homeowners though do not understand mortgage refinance or the advantages it can provide. Here are some of the most popular reasons to refinance.

Lower the Monthly Loan Payment

Many homeowners have loans with higher interest rates than what is available now. Some homeowners, especially those who bought in the housing “boom”, got into an ARM (adjustable rate mortgage) loan and have seen the low initial interest rates go up. Refinancing so that the monthly mortgage payment amount is lowered is by far the most popular reason homeowners take action. While closing costs and fees can add up, getting a lower interest rate will usually outweigh these costs. If a homeowner is able to reduce their interest rates by even 1%, a mortgage refinance may benefit them and slash their home loan payments.

Get a Different Loan Type

A lot of homeowners are in a situation where changing the type of loan they have may save them money. Typically, homeowners want to get out of an ARM and into a more stable fixed rate mortgage. A lot of ARM loans had low interest rates to start, but have increased over time, which is the nature of the type of loan. Most of them now have higher interest rates than what is available from a standard type fixed rate mortgage. Homeowners who are planning in staying in their home for awhile will usually benefit from getting out of an ARM and into a more traditional fixed loan. However, for homeowners who are planning on moving or selling their home in the next few years may benefit from doing the opposite and getting into an ARM. A lot of ARM loans offer lower closing costs, and low initial interest rates. Many times, these rates do not change for the first few years, than they begin to adjust. If a homeowner is able to get out of their home before the interest rates increase, they may save themselves a lot of money.

Get Cash Back from the Homes Equity

Their are some homeowners who have, over the years, built up equity in their home and want to use it to their advantage. This is where a cash back mortgage refinancing comes in. Using this method, homeowners are able to, for example, refinance a loan for $50,000, that they owe $20,000 on, and would pocket the $30,000 difference. Typically, these loans are cheaper than loans from banks and personal loans. Some homeowners use this money for a remodel that further increases their homes worth, while others use it to make big purchases or pay down other bills. Be careful though. This type of loan can easily cause long term financial problem if it is not thought through.

Pay Off the Loan Quicker

Some homeowners are fortunate enough to have gotten themselves into a better financial situation since they purchased their home. Whether through a lucky windfall, more disposable income, or a bigger salary, some homeowners may want to pay off their biggest debt, as soon as possible. Typically, a homeowner will refinance into a mortgage that allows them to pay off their mortgage sooner, sometimes shaving 10 or 15 years off the loans repayment length. The monthly payments are usually higher, but the overall savings are massive. This method also allows the homeowner to build equity in their house sooner should they need it in the future.

Mortgage refinancing is not going to be a solution for everybody, but for a lot of people, it will provide many advantages to their current loan, and will save them money. Each person has a unique set of goals, and financial situation that will make certain home loan refinance options more beneficial than others.



Source by Michael Petrone

With Poor Credit You Can Get Yourself a Home Loan

For a lot of people buying a house for the first time can be exciting and fun, but when you have poor credit, it could be a challenge for you. Let’s face the fact that one of the main factors that a mortgage lender considers when approving or denying an applicant for a loan is credit history. The good news is for those who has poor credit, there are sub prime lenders that are willing to loan money to first-time home buyers with such a poor credit.

First of all you have to find a sub prime lender for a poor-credit loan. A subprime lender is a lender that offers loans to those who do not have good credit. These are not your traditional banks and lenders so the fastest and easiest way to find a subprime lender is to contact a mortgage broker or search your local phone for mortgage lenders that specialize in subprime loans.

Step number 2 is to submit a mortgage application. Once you find a subprime lender, the next step is to apply for the mortgage. Even if you do not have a property chosen yet, you can always submit a mortgage application and the subprime lender will approve you or deny you based on your personal financial information.

Last step which is step number 3 is to submit supporting documentation. You’ll need to submit copies of your last two year’s taxes returns, the last two month’s paychecks stubs and copies of the last two month’s bank and brokerage account statements. These documents along with the information you supply on the mortgage application are used by the lender to qualify you for the mortgage. Next thing you know you will have your home immediately.



Source by Danny Baskara