8 Steps To Buying A Home With Poor Credit

8 Steps To Buying A Home With Poor Credit

1. Get a copy of your credit report. You can do this yourself or you can have a Broker check it. Remember there are three bureaus, so check all three. Some Brokers will only pull one unless you ask for three.
If they won't pull all three, go elsewhere or pull them your self. Ideally, you want a "Tri-Merge" report which merges all three so as to remove duplicate items while still showing all three scores.
Your " Credit Score" is the middle of the three. Try http://www.annualcreditreport.com/ for a free report. At this writing, they don't cover the whole country but will soon. You can also go directly to the bureaus.
The three bureaus web addresses are http://www.equifax.com/ , http://www.experian.com/ and http://www.transunion.com/ They may charge a fee or offer the "free" report as part of a credit watch service, which is probably a service you may want as you rebuild your credit.

2. Study the report for accuracy and have any errors corrected. You can do this through each bureau's website, the Broker's credit reporting agency. There may be a charge, but it's well worth it. Correcting derogatory errors on a report can quickly raise your score, qualifying you for higher LTV loans and lower your interest rate. This could save you tens of thousands of dollars over the life of the loan. A Broker's credit reporting agency can also help.

3. Start your road to better credit now. You want to improve it as much as possible so as to refinance as soon as possible. You might even see your score improve before you find just the right house and a package is sent to underwriting. Sometimes an improvement of only a few points will put you into a better category with a higher LTV and/or a lower rate. Ask the Broker what the lender used as your score for the loan at the time of underwriting and if that qualifies you for a lower rate. If you've done your research and found an honest, qualified Broker they will try to lower your rate below their original estimate.

4. Research your area through referrals, advertising and interviews to find a Mortgage Broker that specializes in sub-prime (less than perfect credit) mortgages that you feel comfortable with. If you don't intend on pulling your own credit, this will now become your first step in this process.

5. Discuss your situation in detail with the broker including:

a. Your credit

b. Your Rental payment history and proof of payments

c. Your Employment situation and history

d. The fact that you want a straight zero down loan or one with a seller 2nd or gift of equity with closing costs financed into the loan

e. How much house you qualify for

f. What estimated closing costs will be through a GFE

g. Obtain a Pre-Qualification

6. Find a Realtor who isn't afraid to work with someone who wants to do 100% loan with closing costs financed into the loan. Your Broker may know one. If they balk or seem hesitant, go find someone else.

7. Search the market thoroughly. Be sure the realtor is showing you homes where the seller's situation fits with your needs. This might include 1) Low Mortgage balance, 2) Good value so the appraised value will be above their asking price and 3) A seller that is motivated.

8. Make an offer (multiples if needed) on a home on your terms until you get one accepted and close your home as soon as possible before rates go up.

Have a celebration with your significant other or family. You've earned it. Enjoy your new life as a homeowner while you make all those little improvements necessary to build equity and improve your home's value for the future appraisal relating to a sale or refinance, all the while improving your credit score.

Ron Stone is a mortgage specialist helping people with less than perfect credit in over 40 states.

Mortgage Recycling - Brillrant or Risky ?

Mortgage Recycling - Brilliant or Risky ?
With mortgage rates near 20-year lows, competition in the mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be the best thing since sliced bread.

Whether it's a mortgage with no closing costs or an interest only mortgage, everyone is claiming they can save you a ton of money. Now someone has come out with something called Mortgage Cycling. Mortgage Cycling could save you thousands of dollars or it could cost you your home.

Mortgage cycling is a program that advertises itself as a method to payoff your mortgage in 10 years or less without making biweekly mortgage payments or changing your current mortgage. Does mortgage cycling work as advertised? The answer is unequivocally yes – with a few caveats. I'm going to let you in on the secret to mortgage cycling.

Mortgage cycling is based on making huge lump sum principal payments every 6-10 months. What this means is mortgage cycling works well for those who have at least a few hundred dollars in extra cash at the end of each month. The problem is most people don't have that kind of cash available.

Mortgage Cycling relies on using a revolving Home Equity Line of Credit to make huge lump sum payments against their original mortgage principal balance. When you take out a home equity line of credit, you pay for many of the same expenses as when you financed your original mortgage such as an application fee, title search, appraisal, attorney fees, and points. You also may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. You could find yourself paying hundreds of dollars to establish a home equity line of credit. Most home equity lines of credit also carry what is known as interest rate risk.

Home equity line of credit interest rates are typically variable. The Federal Reserve is currently in the process of raising the overnight federal funds rate. As the Fed continues to raise rates, it is all but inevitable that variable interest rates for mortgages will also rise. Your savings may not be as great as anticipated.

While Mortgage Cycling does have some additional costs for most people, that is not what makes this mortgage reduction strategy risky. If you use a Home Equity Line of Credit and money gets tight, you could lose your home and the equity you have built up. Home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. And if you sell your home, most lines of credit require you to pay off your credit line at that time.

Mortgage Cycling requires you to make mortgage payments and Home Equity Line of Credit payments for up to 10 years. For most people mortgage cycling is an extremely risky way to payoff a mortgage. Mortgage cycling should be used only after a careful assessment of the risks and benefits. Prepaying your mortgage is smart. You should explore all of the mortgage reduction alternatives before choosing Mortgage Cycling as a mortgage reduction strategy.

George Burks of http://www.mybiweeklymortgagepayment.com has offered a biweekly mortgage payment plan with no enrollment fee since 1999. His interest in financial topic is varied. Visit http://www.mybiweeklymortgagepayment.com financial library for more information about a revolving Home Equity Line of Credit.

Article Source: http://EzineArticles.com/?expert=George_Burk

10 Most Common Mortgage Mistakes

10 Most Common Mortgage Mistakes

It is a common occurrence that mortgage applications are refused because of simple mistakes. Here are some of the most common traps people fall into when looking for a mortgage loan. Take some time to digest them; you may well end up saving a small fortune on your mortgage.

1.Unsure how much Deposit to Apply - The more money that is put down or used as a deposit for house purchase, means the less risk for the lender so invariably interest rates are cheaper. Don’t over-stretch yourself too much though and stay within your financial means.

2.Mortgage Broker Track Record - It is well known within the mortgage industry that most mortgage loans fail to go through. Ask your mortgage broker about their past performance and track record and if they provide any guarantees.
3.Lacking Understanding of the Mortgage Process - Obtaining a mortgage loan is not something we do everyday and can be forgiven for not fully appreciating the processes involved. Try and work as close as you can with your mortgage broker who should be able to take the time to explain the issues in layman’s terms and answer any questions you may have.

4.Limited Option Lenders
Not all lenders will be able to offer a full range of mortgage products. Before working with a lender try and ascertain if they can meet your needs beforehand. Better still, work with a mortgage broker who will have many lender contacts and will be able to guide you to a lender that meets your needs.

5.Undertaking Big Purchases / Commitments Prior to Your Mortgage Loan Application - People can be forgiven for thinking that it is best advice to get large purchases out of the way before committing to a long term mortgage. However, total debt relative to income is a key ratio when lenders are assessing applications and it is probably best therefore to leave such expenditure until after your mortgage has been agreed and drawn.

6.Analysis Paralysis - We all would like the best interest rate possible and this should be your goal. Bear in mind that every application you make to a lender will result in a credit check; too many of these will affect your credit rating. A mortgage broker will be useful here as with their inside knowledge of the market and the lenders they have on their books will negate the need for processing applications purely to establish interest rates.

7.Hiding the Facts - Many people have experienced financial difficulty at one time or another. The temptation is to hide such facts from your broker or mortgage loan lender but they are there to help you obtain your mortgage and these difficulties can be overcome, especially if they are known upfront and do not subsequently come out of the woodwork.

8.Late or Bad Payment Record - A bad payment record, especially within the previous year can have negative effect when trying to get the best mortgage loan terms and interest rate possible. Indeed, it could easily lead to a refusal of your request for mortgage finance. Obvious advice but, keep on top of your finances and pay bills in a timely manner.

9.Excessive use of Credit Cards - You should aim to keep your total debt as minimal as you can if you wish to obtain a mortgage loan on the best terms. Keep credit cards balances as low as possible or better still, pay off the balances.

10.Failure to obtain all the Detail - Before finally committing yourself to a mortgage ascertain what the total upfront, closing costs and any ongoing costs are going to be. A difference of a fraction of a percent when comparing lenders does not look significant but will have a massive effect over the term of the mortgage loan. Obtain all the relevant facts and there will not be any nasty surprises awaiting you!

Article Source: http://EzineArticles.com/?expert=Mark_J_Emslie

ESTABLISH AAA CREDIT IN 30 DAYS

ESTABLISH AAA CREDIT IN 30 DAYS

To work this plan you need at least $400 to begin. You should borrow this from your friends if necessary. Then go to a bank of your choice and deposit the $400 into a regular passbook savings account.

Wait a few days for the account to be posted and return to the bank to ask for a $400 loan - you offer the passbook as collateral. Since the bank is already holding your $400, you go to another bank open a savings account lending you another $400 and they won’t even make a credit check. Then, with your borrowed $400, you go to another bank, open a savings account, return a few days later, borrow $400 from that bank using your passbook as collateral.

Then repeat the process at a third bank with your borrowed $400. Wait a few days to go to a fourth bank where you open this time a CHECKING account. Wait a few days and make a payment on each of the other three loans. A week later, make payments again on the three loans, and continue paying each week until you have almost paid off the balance.

A credit investigation at this point will show you with three active bank loans (which are considered hard to get), a checking account, and a paying history for the three bank loans - with you having paid up in advance. Thus, you have AAA credit in as little as 30 days. From here you go on to apply for loans, credit cards, and other items on credit.

Get Free Content at http://www.ContentMart.com

5 Criteria To Get Your Home Loan Mortgage approved

Why do some people get their home loan mortgages approved in a breeze while others struggle through with hiccups? What are the differentiating factors between one application and another? What do lenders look at when they evaluate you?

In reality, getting your home mortgage approved depends on how your background matches the list of criteria set forth by the lender. Although these rules that they have are not always entirely hard and fast, the loan application officer does not stray too far away the guidelines he or she has been entrusted with. Needless to say, applicants should at best present themselves as creditworthy creditors and have the adequate documented records as proof of this.

Believe or not, lenders have a scoring system for aspects of your background that they are evaluating. The following are areas in which you will be scrutinized on:

1. Employment History
You must have been in employment for not less than 2 consecutive years within the same industry. This shows that you have the capability to be sustained in a permanent position, and do not hop from one job to another. Lenders look for stability and consistency as best they can, and your employment history is a good basis for them to evaluate your capability to generate income to finance your mortgage.

2. Credit History
The next indicator of your credit-worthiness is your short-term debt, a.k.a. your credit card bills. It's ok to have some debt on your credit card, but you must show a history of on-time payments. Apart from that, too much debt on credit cards with credit lines fully utilized shows the possible inability to pay for debt. Therefore, at least six months before applying for a loan, it would be best to clean up your short term debt as much as possible.

3. Outstanding Liabilities
The size of your income dictates the amount of liability you can support. As a rule of thumb, lenders stipulate that a person's total monthly payments for liabilities should not exceed 42% of his or her monthly earnings. With this, total liabilities include credit card debt, car loans, student loans, existing mortgages or child support collectively. This means that in order to qualify for your home loan mortgage, you need to reduce your monthly repayments on liabilities to the point which is acceptable by the lender.

4. Cash and Asset Reserves
Another aspect to show that you can afford your home loan mortgage is to provide proof to the lender on the amount of cash and liquid assets that you possess. The minimum reserves that you have must be sufficient to pay at least 2 months of monthly repayments for mortgage payments. Some lenders even go to the extent of requiring 6 months worth of reserves in order to qualify.

5. Existing Housing Repayments
Finally, if you already have existing housing rental payments, there should not be any late repayments for these within the past 12 months. This again shows your priorities as a responsible tenant and is adequate proof to the lender that you potentially will be a responsible borrower as well.

Some applicants who may lack supporting documents for their home loan mortgage applications should compensate by providing documents that will help to prove themselves to be responsible pay masters. These could be payments receipts of utility bills, phone bills or even car insurance, which are useful documents to be used to prove that you are indeed creditworthy.

About The Author
Chris Edison is a successful author and regular contributor to http://www.mortgage-traps.com a home mortgage loan information site, that reveals mortgage traps for home buyers.
Get Free Content at ContentMart.com

5 Tips To Get Yourself Ready For A Home Loan Application

5 Tips To Get Yourself Ready For A Home Loan Application

by Justin KohSo

you need to get a home loan to finance that new house? There are some things you must know to prepare yourself adequately for a favorable application.

1) Know your state of finance. Tabulating the numbers is the key to avoid future disappointment. Is the price of the new house within the range you can afford? How much you can afford will also be influenced by home-related cost like furniture, home accessories and gadgets, insurance, utility bills etc. Self-awareness through budget planning--a few months beforehand--enables you to anticipate for the amount of loan required so that you can repay it promptly.

2) Know your credit report is in good stead. Your credibility is what the lending company looks for in your financial background before it can approve a loan. You can find out your credit score through reports generated from Equifax Score Power, True Credit, or Consumerinfo. A low score almost always leads to high interest rates. Many factors determine your score, including length of history, income, a profiling of your debt and credit obligations etc. If there are areas in your report which can be improved, like closing unnecessary accounts, take the necessary actions and wait around 60 days for the latest status to take effect, then get another copy of your credit report.

3) Know all that you need about the fees and interest rates. Do a comparison of all the lending companies before settling down on the suitable one. Check that all terms and conditions are understood, and there are no other hidden cost. If you have questions, simply ask to clear the air.

4) Know what's the repayment method is like. Depending on the company's policy, you may pay back a portion of the loan plus interest, just the interest for the whole length of the loan plan or the complete sum including interest after the plan is completed. Discuss with the loan officer about your personal repayment capability to reach a mutual agreement.

5) Know what documents are needed for the application. Again check with the loan officer early to give yourself time to prepare them, which are likely to be your pay slip, home insurance policy, driver's licence and social security information.Finally, if you can apply for a loan online, you are most encouraged to do so. Instant Internet access gives you convenience and cuts short the time instead of you having to wait in the office for the paperwork to be done.

About the author:Justin Koh is the original contributor of this article for http://www.homeloanscenter.info

4 Good Reasons to Get a Refinance Home Loan

Refinance Your Home Now and Lower Your Interest Rate

What is a refinance home loan? A refinance home loan or a home loan refinance is a new loan obtained through your lender or a new lender to pay off existing loan. However, you may opt to apply for a lower interest rate and or cash out on your homes equity.
When should I refinance my home? It is a known fact that interest rates are lower than they have been in years. This is due to our fast paced and ever changing economy and market. Now would be the perfect opportunity to refinance your home to obtain a lower interest rate. Even a .25 difference can save you thousands of dollars a year in mortgage payments.
Why should I refinance my home? There are several reasons home owners decides to refinance. The four most common reasons include:
To obtain a lower interest rate
Home owner generally are aware of interest rate down fall. They take advantage of this opportunity by applying to a refinance loan to lower their existing interest rates and save money on mortgage expenses. The money that a borrower saves on mortgage expenses can be invested in other financial investments.
To receive a refinance cash out
Some home owners who have enough equity accumulated in their homes refinance to cash out their equity and get a lower interest rate
To make home improvements
Sooner than later you will find that maintaining your home is hard work (not to mention quite expensive). In most cases, home owners will pursue a refinance, rather than a personal loan, in order to save on interest rates. A personal loan may have higher interest rates and are normally, not as large as a home improvement loan.
To change loan programs
A majority of home owner refinance because they are not satisfied with their current loan program. They may be under a 5 year arm, but somewhere down the line they decided they would prefer a 30 year fixed loan. Whatever the reason may be, a refinance home loan will solve the problem.
What are the benefits of refinancing my home?There are several benefits included with refinancing your home, including:Your credit may be in better standings then before you purchased your home, now you can refinance and obtain a more suitable loan, with lower interest rates and terms.Or, you can obtain a home equity line of credit and have cash available when you need it.With refinance cash out, your lender can consolidate your bills and pay off all of your debt. You will not have to deal with the hassle by yourself.What are the different refinance loan options?As with a traditional loan, refinance home loans offer some of the same loan programs, such as:10/15/30 year fixedZero DownInterest OnlyAnd so onWhere can I refinance my loan?You can apply for a refinance home loan through your current lender. Or you may search for a new lender more suitable to your financial needs. This search can be done by internet search, flipping through the yellow pages, or consulting with your real estate agent.
About the Author
Khali S. founder of Home Loan Guidance - a free online guide to help discover more home loan options secrets.