Mortgage and Credit Card Companies Under the Spotlight on Consumer Charging
March 10, 2010
For the first time since May 1996 reports have indicated that wage increases have risen faster than house price inflation. According to Nationwide, “The overall picture remains one of a gently softening market”.
The signs indicate that the housing market activity is finally starting to pick up, with estate agents reporting that buyers have begun returning to the market and sellers are more willing to negotiate on prices, however transaction levels are still reported to be low compared with last year. This represents good news for buyers looking to get a property, however it stands in stark contrast to findings from the Council of Mortgage Lenders (CML) showing that the number of homes being repossessed has risen for the first time in seven years, from 3,070 six months ago up to 4,640 for the first half of 2005.
The sharp rise in home repossession applications by lenders adds to growing concerns that consumers are struggling with debt. Ed Stansfield of Capital Economics, said, “Today’s figures show that for a small but growing minority of borrowers levels of debt have become a problem, despite historically low interest rates." These figures for repossessions were still, according to the CML, “extremely low” compared with the early 1990s; however adverse credit, arrears and repossessions look set to rise.
Home Loan Refinancing - What Lenders Dont Want You To Know
March 7, 2010
Refinancing lenders seems to hold all the cards. They have the money and their own system for determining which type of credit you can qualify for. What lenders don’t want you to know is that you can improve your credit rating in a matter of days.
Good Credit Factors
Good credit does not mean perfect credit. People assume a 30 day late payment means poor credit. Not true. You can still have good credit score if you have two 30 day late payments on a credit card or one 30 day late payment on a car loan within the last three years. After three years, the payment history will drop off your credit report.
While you don’t want too much debt when applying to refinance, having a credit card can help your credit score. Have at least one credit card and make regular payments on it. If you are worried about the interest charges, pay off the balance every month. Those regular payments establish your credit payment history, a large factor in determining rates.
Ways To Boost Your Credit Rating
Refinance Your Mortgage to Rebuild Credit
March 5, 2010
Refinancing your mortgage is one way to rebuild your credit, particularly if you have recently declared bankruptcy. With a poor credit history, you can find refinancing through a sub prime lender. To rebuild your credit, make regular payments on your mortgage and other bills. Then after two years, refinance again for lower rates with your now good credit rating.
A Note About Sub Prime Lenders
Sub prime lenders offer B, C, and D credit, which means they offer credit to high risk lenders. For taking on these high-risk loans, sub prime lenders charge slightly higher interest rates and fees.
Some sub prime lenders charge excessively high fees, but you can screen these out by comparing mortgage rates. Online mortgage lenders make this easy with their online quotes and posted rates.
Applying For Refinancing
Applying for refinancing has been made easy with the internet. The first step is to collect several financing offers, and sort through them. Look for low fees and interest rates.
Once you have picked a mortgage lender, fill out the application either online or request an application mailed out to you. Once you have submitted your application, it will be reviewed and processed. You refinancing should be completed in about 6 weeks.
Mortgage Refinance - Tips to Help You Cut Fees and Costs
March 3, 2010
Saving money through a mortgage refi is more than just finding the lowest interest rates. You can further cut fees and costs through the structure of your loan, avoiding PMI, and buying lower interest rates.
Close Credit Card Accounts
Close inactive credit card accounts to improve your credit score, making you eligible for lower interest rate loans. You will need to notify the credit card companies in writing that you wish the accounts closed on your request.
Next, check your credit report after 30 days to be sure closed accounts include the comment "Closed at Customer’s Request." You want future lenders to know it was your request and not bad credit that closed your accounts. Also, take the time to check for any mistakes in your credit report that could negatively impact your credit score.
Avoid The Hidden Cost Of PMI
When refinancing a mortgage, as many as 30% of homeowner’s cash out part or all of their home’s equity. By investing in home improvements or paying off credit cards, this can be a smart. But, if you are borrowing more than 80% of your home’s value, you will be hit with private mortgage insurance, costing you hundreds a year.
Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage
February 28, 2010
Refinancing your house’s mortgage is not the same thing as getting a second mortgage. While both allow you to cash out your home’s equity, terms and rates differ between the two types of loans. To know which financing option is best for you, learn each loan’s features and pick the one that best meets your needs.
Refinancing Your Mortgage
Traditional refinancing is basically replacing one mortgage loan with another. Typically, refinancing lowers mortgage payments through lower interest rates or longer loan terms. You can also cash out part or all of your home’s equity while refinancing.
Refinancing requires paying closing fees. To recoup these costs, you usually need to stay in the house for a couple of years. However, you will save money with better terms than if you choose a second mortgage.
Second Mortgage Option
Second mortgages, also known as home equity loan, have slightly higher rates than mortgages, but you have less or no closing costs. Second mortgages also only charge interest on the amount you borrow, not the total amount you are approved for. You can take out your equity over the course of several months or years. Terms vary widely between second mortgage lenders, so watch out for balloon payments or repayment fees.
Home Mortgage Refinancing - Things to Consider When Looking to Get Cash Out on a Refinance
February 27, 2010
When you refinance your home mortgage, lenders often tempt you with the option of cashing out part of your home’s equity. Cash at a comparably low interest rate may seem like a good option, but make sure you will financially benefit from it first.
Raising Your Home’s Value
Only some home improvements raise the value of your home. Bathroom and kitchen upgrades are one example of this. However, with most remodel jobs, you will not see a financial gain. If you are using your home’s equity to fund projects, make sure that your investment will pay off.
Saving On Interest Payments
Paying off credit cards with your home’s equity will save you money in two ways. First of all, you will save on interest payments. Secondly, the interest you pay on your mortgage is tax deductible, unlike credit card interest.
PMI Penalty
Private mortgage insurance kicks in if you borrow more than 80% of your home’s value. These extra payments can add up to several hundred dollars a year, so be careful how much you borrow. Other lines of credit may be more cost efficient when you factor in the cost of PMI on your mortgage.
Refinancing Online - Tips For Getting a Low Interest Rate When Applying Online
February 24, 2010
Refinancing online is a great opportunity to find low interest rates. Online mortgage lenders provide information about rates and fees for easy comparisons. However, to find the lowest interest rates, you will need to do more than just surf sites. The following tips will give you the edge in your refinancing search.
Clean Up Your Credit
You make think your credit history is good, but what does your credit report say? Errors on credit reports are not uncommon. Left uncorrected, you will be forced to pay higher interest rates.
So before you begin your application process, request your free credit report from one of the three agencies. If you find any errors, file a consumer dispute with the credit reporting agency. Next, contact the creditor to resolve the error. Your last option is to file an explanation on your credit report.
Compare Closing Costs and Interest Rates
The biggest benefit to refinancing your mortgage online is the ability to compare fees and interest rates. You can save yourself thousands of dollars by searching for the lowest loan costs.
Refinancing After Bankruptcy
February 22, 2010
Refinancing after a bankruptcy can seem like an especially difficult challenge, but it doesn’t have to be. Six months after your bankruptcy has been finalized, you can find lenders willing to refinance your mortgage. In fact, refinancing your mortgage can help rebuild your credit to good standing in two year’s time. The following steps will help you find the best refinance lender while helping your rebuild your credit record.
Preparing For Refinancing
Right after bankruptcy, you have six months to prepare to refinance your mortgage. Begin by establishing good payment history by regularly paying your bills and current mortgage. This is also a good time to open a credit card account to start establishing good credit history.
If possible, also start building up a savings account. The more cash assets you have, the better your application will look. Consider having a garage sale or taking a second job to raise funds.
Researching Lenders
Once you are ready to refinance, research mortgage lenders and their rates. Online mortgage websites allow easy comparison shopping. Look at both interest rates and fees of refinancing quotes. Usually a slightly higher rate with low fees is the best deal.
2nd Mortgage - Better Than Refinancing
February 20, 2010
You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home’s equity. But a 2nd mortgage, also called an equity loan, may be a better financing option than refinancing your mortgage. 2nd mortgages are ideal when you just want to tap into your equity, plan to move soon, or are unsure about the amount you want to borrow.
Tapping Your Equity
Tapping into your home’s equity is best done through a 2nd mortgage if you already have a low interest loan. Typically, applying for a 2nd mortgage requires fewer fees than refinancing a mortgage. 2nd mortgages are also paid back sooner, so your interest payments are less.
Short-Term Loan
With the costs involved in refinancing, you typically need to keep the loan for about two years to break even. However, with a 2nd mortgage you don’t have those fees to worry about recovering. 2nd mortgages do have minimum balance and early pay off fees, but they are significantly less than refinancing fees.
Flexible Loan Amount
First Time Buyer Mortgages ? Transforming Homeless into Property Owners
February 17, 2010
Having just settled in life, you are finding the rentals putting too much of a burden on your finances. Nevertheless, you continue the payments thinking that purchasing a home would be practically impossible. There are many expenses that one has to necessarily make in order to just make a bare subsistence. Though the list differs with each individual as each has a subjective concept of the necessities, it is difficult to accumulate enough savings to pay for a house.
The following characterises most of the first time buyers. However, a surprise awaits them in the form of first time buyer mortgages that accept first time buyers with their inherent characteristics of financial weakness.
It is wrong to believe that first time buyer mortgages are like any other mortgages, and have been so named by lenders to attract attention. A first time buyer mortgage is designed primarily for the people who are buying homes for the first time. The method combines the features of mortgage along with a lower rate of interest. This is known as the discounted rate of interest. Relief from paying at the standard rate for the initial few years makes these mortgages less onerous. Once the discount period ends, the borrower will have to pay at the normal rate that is prevailing in the market, go for the various schemes that lower the interest rate, or opt for a remortgage (this has been explained later).
