By financen | October 22, 2018 - 3:47 pm - Posted in Bad Credit, Home Loan, Home loans
Home loan

Home loan

If you’ve got bad credit but you want to get a home loan, you may be worried about your options. Don’t panic – having bad credit doesn’t mean you can’t get a home loan. Just follow these top tips and see how things go.

Time your home loan application

Most lenders will be wary about lending money to you for a home loan if you have just been declared bankrupt or recently discharged from bankruptcy. You need to wait until your financial situation is as stable as possible before you apply for a home loan. Try to time your home loan application for when you have a stable address and can show evidence of a regular income.

Get a larger deposit

Having a larger deposit or down payment for your home loan means that you’ll need to borrow less money from the lender. This reassures the lender that you are less of a risk to them, and it can also reduce the amount of money you pay overall in interest and additional fees.

Get a guarantor

If you have a very close friend or relative who is able to act as a guarantor, you may be able to get a home loan with bad credit. Make sure that your guarantor is 100% comfortable with the position though and ensure that they have the funds to pay back the home loan if you default on your repayments.

Work with a bad credit specialist

Finding the right home loan provider is a huge step to getting a home loan with bad credit. Find a lender who works with people with bad credit to avoid applying to lenders who may automatically reject you on account of you having bad credit.

Show proof of repaid loans or financial stability

If you have bad credit, it may not necessarily mean that you are financially unstable. If you have proof of repaid loans or bills that have been paid on time, show these to your lender to reassure them that you are a responsible borrower and will be able to pay back your home loan.

Borrow less

If your credit is bad and you’re looking for a loan for a large home, you may need to considering borrowing less and downsizing on the property that you’re after. This could also mean that you’re under less financial strain to make large repayments that could cause you stress.

Budget properly

Always be realistic about how you will be able to afford your repayments. It’s easy to get carried away with a home loan when you’re tempted by finding your dream home but budget properly and make sure that you’ll be able to repay your loan. Failing to repay what you owe could result in you damaging your credit further.

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By financen | April 30, 2018 - 5:16 pm - Posted in Home loans, Loan

Home loan is one of the most important factors when buying a house. This helps you financially to finally make your dream come true. Thus, it is important to choose and decide carefully about the right loan type that will suit you best. Two of the most common loan types are fixed rate and variable home rate.

In this article, we will discuss these two types of home loan including advantages and disadvantages to help you decide which is the best type to apply for. This is very important to make sure that there will be no problem when paying off your mortgage.

Fixed rate home loan

Fixed rate home loan charges “fixed” (thus the name) interest rates that does not change throughout the lifespan of the loan. It does not matter if the cash rates or interest rates are lower or higher for particular month. With fixed rate home loan, you have a fixed amount that you need to pay each month despite all other factors.

Advantages of fixed rate loan

  1. With fixed rate mortgage, borrower is protected from sudden increase of monthly payments in case interest rates rise.
  2. It is easier to understand and remember the amount you owe each amount because the amount is fixed.
  3. It is easier to save and plan your budget since you know the exact amount that you need to pay. You can allot the specific amount so you are sure that when the due date arrives that you have money to pay.

Disadvantages of fixed rate loan

  1. It may be difficult to qualify for a loan especially when the interest rates are high.
  2. It may also be difficult to avail this type of loan if you have less than excellent credit score.

Finding the lowest fixed rate home loan should be your main goal in case you decided to go for this type of loan. Also, be sure that your credit score is excellent.

Variable rate home loan

This type of loan is also known as adjustable-rate mortgage with interest rate that varies over time. The initial interest rate is set below the market rate compared to fixed rate. However, over time, the rate varies depending on the current interest and cash rates so there are chances that it will go high or low.

Advantages of variable rate home loan

  1. The initial payments can be very low.
  2. The borrower can enjoy lower interest rates in case the cash rates and interest rates in the market is low.
  3. Availing loan in this type is easier even for first time borrowers.

Disadvantages of variable rate home loan

  1. Monthly payments may change frequently and significantly.
  2. It can be difficult when the interest rates rise especially if you avail a large amount of loan.
  3. It is more complicated to plan your budget since you do not know the exact amount you need to pay. Sometimes, your estimates might be lower that can ruin your entire budget for the month.

So what is the right type of home loan to avail? It is important that you weigh the advantages and disadvantages. Also, take into consideration your income as well as your lifestyle to know which type of loan is best for you.

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By financen | October 28, 2014 - 4:42 am - Posted in Home Finance, Home loans, Home refinancing, Personal Finance

Home finances can be a daunting subject for most couples (even singles). The logistics of creating a budget while making sure that each bill is paid on time, and at the same, ensuring that you and your family don’t go hungry is enough to make your head spin. A lot of us who manage the finances of our family are trained handle this type of responsibilities. However, it doesn’t mean we are unable to create a budget that will ensure that we meet all of our obligations, at the same time, allowing extra money for fun. It all boils down to organization. If paying your mortgage is part of the picture, then using a mortgage interest calculator can be of great help.

Here are a few tips to help you organise your finances at home:

  1. Make a list

This list should include all your monthly bills and the days they are due. Also include a reasonable monthly budget for food and grocery items. You also have to set aside an amount to pay your utilities and other expenses. Add the total amount of your expenses and less this to your monthly income. This will give you an idea how much extra money you have that you can save or use to buy some of the things you or your family need. This budget planner is probably the best example I have used to date. It really is excellent.

  1. Set up a savings system

Saving is the most important thing you can do for yourself and your family. At bare minimum you should have a savings account for emergencies and one for extras. Emergencies include things like a broken water pipe or anyone in the family getting sick. Extras are for buying a gift for your mother’s birthday. You can have these savings build up either in separate bank accounts or in a safe place in your home. It is wiser to keep your emergency account at a bank for safekeeping.

  1. Make a plan for paying off debts

Most people have several credit cards, car loans, mortgages, and other types of debt. The best thing you can do for yourself is to get rid of it! Start with the smallest debt and pay it off. Once you do that, you can then focus on the bigger and longer term debts like your car loan or mortgage payments. In case you come up with a substantial amount, try to pay off the bigger debts. If you have good credit, check out a balance transfer deal as these can save you a lot of money. They’re relatively easy to set up when you apply for a credit card online. Use the money saved to repay debt and keep this up until you are debt free!

  1. HomeNever take out a payday loan

A payday loan may seem like a good idea because you get cash quickly; however, it also comes with high interest rates. Paying a loan with high interest rates will only put you in a deeper hole than you started in. When emergency crops up, and you don’t have the savings to cover it, instead of going for these types of high interest rate loans, consider selling some things or swallowing your pride and call your mum for financial assistance.

  1. Know how you will pay each bill before you get it

Since you have made a list of the bills to pay, you already know when they are due and how much they will be for (with a few exceptions). It’s time to decide where the money is coming from. If you are paid monthly, this is easy. If not, then you will need to decide which week you will pay which bills. Make sure to get them paid a few days early, so you are never worried about late fees.

  1. Budget your leftover money

After you have figured out how much you need for bills, groceries, transportation, and savings, you can start looking at your “extra” money. If you like to take vacations, then you will need to set aside some to save for that. Other than that, you might want to budget a certain amount of weekly fun money for each family member.

  1. Files

A good way to keep track of all of your bills, receipts, and payments is to keep a file folder. Have a separate folder for each bill and bank account. To keep them organized, keep all the relevant information in the file. For example: electric bill for January – keep a copy of the bill, a copy of the check you paid, and the receipt of payment. If necessary, keep any other correspondence about the bill in that file as well. Shoeboxed is about as good as it gets for this.

home-loans

  1. Balance your account daily

Save all the receipts you get in a given day in your wallet. At the end of your day take five minutes to get them out and write them down or check them against your online account statement. This has the added benefit of making you consider what you buy because balancing the books isn’t exactly fun.

  1. Cut corners where you can

Groceries don’t have to be your most expensive bill. Most local brands taste about the same as the branded ones. Also, you don’t have to cook a gourmet meal every night. Most kids and men like Mac ‘n cheese just fine. Also if money is tight, you don’t have to go to the salon to get your nails done. Make a one-time manicure kit purchase and do your own. Learn to paint your own house. Seriously, your budget will thank you.

  1. Relax

Money does not have to be a constant source of aggravation and worry. Once you have a system set up, then you can just run through the system each month without a lot of thought.

Managing your finances need not be an overwhelming task. There are many resources, methods and tools like the mortgage insurance calculator that help in manage your home finances. You can do it!

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By financen | March 31, 2009 - 4:54 pm - Posted in FHA, Home loans

The Federal Housing Administration has been helping Americans own their own homes since 1934. In 1934, all Americans were struggling financially due to the Great Depression. Most Americans were renting their homes (if they had a home to live in). Today American’s find themselves in situations similar to our Grandparents and Great Grandparents. Owning or keeping a home can feel like an impossible dream. Today, the FHA remains committed to helping The United States of America be a country of home owners.

You are probably wondering exactly how does the FHA help Americans become homeowners. The FHA does not loan money; it insures the mortgage loan. This means that FHA will pay the lender (bank or mortgage company) if the homeowner cannot. In exchange for this insurance the FHA demands that lenders make mortgages more affordable to the average American. This process allows lenders to confidently lend money to people that might not otherwise be able to obtain a loan.

Benefits to the home buyer:

  •   Easier to qualify
  •   The FHA does not require perfect credit for its home buyers.

In fact the FHA does not require any minimum credit score to qualify. The FHA understands that “life happens” and there are various circumstances that can cause a person to have financial difficulty. Therefore the FHA looks at your overall credit history and takes into account life’s unexpected circumstances when approving your loan.

  • Smaller/ less restrictive down payment
  • The FHA requires only a 3.5% down payment. This is considerably lower than a conventional mortgage. Additionally, on an FHA loan, down payment money can come from many sources, including a gift from a family member or government agency. This can be a huge help, as saving for a down payment is one thing that keeps many people from owning their own home.
  • Low cost
  • In general, due to low interest rates, FHA monthly mortgage payments are more affordable.
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