Home loans for people with bad credit
By financen | October 30, 2008 - 5:33 pm - Posted in Bad Credit, Home Loan, Loan

People with bad credit often get disheartened when they are not approved for any kind of home loans from any reputed financial institutions or lenders. There are ways by which you should be able to get home loans from any reputable financial institution just like any other person with a good credit history.


Find out a good deal: Finding a good deal on real estate can be quite a challenging task, and if you get one, it will be very rewarding, especially for someone with a bad credit history. When you purchase a home at a cheap price and get equity in the property, the loan officer will consider your bad credit home loan as a partially secured loan. Talk to a mortgage broker to know how these kinds of transactions will help you in getting approved for a home loan.

Investigate creative financing: You need to be a little creative when you are shopping for a bad credit home loan. There are a variety of ways by which you can get approved for a bad credit home loan. Adjustable Rate Mortgage is one of the common ways by which people get approved for a home loan because their interest rates are quite low. Another way to get approved for a home loan is to involve the seller when you are applying for the loan. The seller can cover most part of the down payment on purchase. Or you can ask the seller to carry back a second mortgage that you repay back to them at a very low interest rate. These creative techniques will help you get an extra $10,000 while applying for the loan with bad credit.

Always believe in a down payment: prefer to make a down payment of at least 3% – 5% of the loan amount. Of course, the more you can put in a down payment, you will be paying less in interests on the remaining balance. A drop of 2% in the interest rate on a $150,000 loan can save you over $72,000 in interest over the course of a 30 year loan. Plus you borrow a less amount in financing. If required, wait for some months so that you can build up more funds to make a down payment to the loan company.

Shop around with different companies: always shop with different lenders while you are applying for a home loan. The interests and fees may vary with different lenders. The mortgage brokers will try to convince you that their skill and experience in the market has helped many people in need of home loans and they are going to help you too. Don’t be carried away by their words if they say that no one else is going to offer you a better deal than them, especially when you are having bad credit. Browse through the internet and you will find so many lenders in your area offering lucrative deals. An online mortgage specialist is often the best person to contact to get home loans for people with bad credit.

Improve your credit scores: While your credit is already bad, you may find out different ways to boost up your credit ratings. Review your latest credit report and go through all the items reported on your copy. You may find out some inaccurate items on your file that should be immediately disputed. Once the incorrect items are removed from your credit report, your credit scores will go up. Then you can contact the other creditors to whom you owe a balance and work out payment arrangements.

Bad credit doesn’t have to stop you from getting a mortgage even if it does make it more expensive. Home loans for people with bad credit are available from a variety of lenders who specialize in bad credit home loans. They can make it easy for you to finance your perfect home.

1 Comment
Understand and fix your FICO score
By financen | October 20, 2008 - 6:12 pm - Posted in Credit Score, FICO score

When anyone applies for a loan or a new credit, many lenders go through his FICO scores and review his credit history. If you are having a poor credit rating, you may not qualify for the loan or even if you do so, you will be charged very high interest rates because of the low FICO scores.

As per the laws, Fair Issac and Company is not required to disclose how they calculate the FICO score. The content on the credit report weighs heavily on the calculation.

The FICO score system is quite straightforward. You will be able to get better interest rates and attractive offers from different lenders if you have high FICO scores. Besides, you will also get qualified for higher loan amounts because of the scores.

Someone having a FICO score of less than 500 has limited options if he is applying for a mortgage loan. There are many sub prime mortgage lenders that specialize in bad credit mortgages, however you will have to pay a premium for their services.


If your FICO score is between 500-600, you will get competitive financing from the market. You may be required to pay points up from in order to qualify. Points are prepaid interest that you must pay when required, at closing. A “point” is 1% of the total loan amount financed. This is not a payment on the loan balance, in many cases this is an up-front fee your lender is requiring for you to qualify.

Someone having a FICO score in between 640-700 has very good chances of finding a mortgage with very good interest rates and the terms and conditions improve dramatically. You always have the room to negotiate with the lender for better interest rates and fewer fees because of the FICO scores that becomes a bargaining chip for you.
If your FICO score is more than 700, then the mortgage lenders will be falling over themselves for your business. You can qualify for almost 125 percent of your home value. Based on your FICO scores, you should be able to negotiate with the lender that you should not be charged any kinds of fees or penalties whatsoever. With this kind of scores, you must always compare loans, credit card, compare mortgages offers.

The FICO scores are calculated on the basis of the information reported on your credit report. Make sure that all the items reported on your file are correct. These records are maintained by three separate companies and are prone to errors. You must always pay down the balances on your credit cards and close any accounts you do not need. You should also ensure that the payments are done on time and the creditors are reporting your payments to the credit bureaus. You should not carry large balances on your credit cards. Do not make any large purchases while shopping for a mortgage, and do not let lenders access your credit until you have selected the best mortgage. Your FICO scores will get damaged because of too many credit inquiries by the lenders.

Comments Off on Understand and fix your FICO score
Know your rights against harassment from creditors and collection agencies
By financen | October 16, 2008 - 4:02 pm - Posted in Collection Agency, Creditors, Debt

Debt collectors are very famous for crossing the lines and violating the federal laws in their attempts to obtain payment. They will use their most scary and intimidating tactics to recover payments from you. In most of the cases, people are not aware of the legal restrictions applicable during collections and that’s why they end up being harassed by the creditors and the collection agencies.

Following are the possible violations of the FDCPA:

  • When a collection agency is contacting a third party, they have to identify themselves with their business. If they don’t tell you the name of their company for whom they are doing the collections, it is a violation of the law. They are only required the collect the contact information of the person on whom they are doing the collections.
  • Debt collectors cannot discuss about your debts with the third parties. If they try to give your personal information or disclose your debt details, it is a violation of the law.
  • Collection agencies are allowed to contact the third party once only, unless they are requested to be called again.
  • Collection agencies cannot contact you after you are being represented by an attorney. If they are try to call you after receiving the power of attorney from your lawyer, it is a violation of the FDCPA.
  • Collection agencies are allowed to call between 8 am and 9 pm, your time. They are not allowed to contact your place of work or home after you have sent the partial cease and desist letter and requested communication in writing only.

Following cases are considered to be harassment or abuse:

  • Debt collectors harass, oppress, or abuse any person
  • Threat of Force or criminal means to harm you or your property
  • Using profane language
  • Calling repeatedly
  • Calling you without disclosing identity (“I am a debt collector attempting to collect a debt”)
  • Most of the collection agencies violating the laws are famous for presenting false and misleading information to recover the payments from the consumers. They will attempt to collect more than what is owed. In certain cases, they will use scary and intimidating tactics like they are calling from the federal bureau or the attorney’s place and if the payment is not done, they will take you to the jail, or garnish wages. Don’t be afraid if they are threatening to sue you. They are trying to blow hot air.
6 Comments
Know your legal rights regarding vehicle repossession
By financen | October 10, 2008 - 9:34 am - Posted in Repossession


When you own a car, truck or other vehicle on credit, it is very important that you stay regular in your monthly payments with the loan company because the title is with the loan company and they reserve some important rights on the vehicle. They have these rights on your vehicle because you signed the agreement with them according to your state laws. If you fail to make timely payments, they can repossess your vehicle anytime without taking the matter to the court. In some states, the creditors don’t even need to send a warning letter to the customer before repossessing the vehicle.

While your creditors have some legal rights to repossess the vehicle, they do have some limitations also before taking it. In particular, the creditors have to follow certain laws on how to repossess the vehicle and how much it is to be resold in an auction. If the laws are violated, they will lose other rights against you, and pay for the damages. Some of the consumers’ rights are mentioned here. You may get more information from your state consumer protection agency or a private attorney.

  • Seizing the vehicle:

The creditor has the right to seize your vehicle when you have defaulted in your monthly payments to them. Read the contract copy signed with the loan company to understand what constitutes a default as per their agreement. You must talk to the loan company if you are expecting a default and work out a prior arrangement. Make sure that you have all the arrangements done in writing for future records.

While seizing your vehicle, the creditor should not violate the breach of peace. Taking your car over your protest or using threats is illegal. They are not legally allowed to take your vehicle from a closed garage without your permission. They are not allowed to cause any damage to you or your property and if this is done, they have to compensate you for the damages done. It will result in breach of peace as per the laws of your state.

  • Reselling the car:

Once the creditor has repossessed your vehicle, the creditor may keep the car for a certain period of time so that you can catch up the monthly payments and take it back. Or, he can sell the car in a public or a private auction. In any case, the creditor has to notify you in advance before the date of auction. You may want to exercise this right if the car is worth more than what you owe on it.

The auction of the repossessed vehicle must be done in a commercial reasonable manner. If the creditor tries to sell the car at a price below the fair market value, you are legally allowed to put a claim against the creditor for damages or a defense against a deficiency judgment.

41 Comments
Falling mortgage rates increases the chance of debt consolidation
By financen | October 4, 2008 - 6:00 pm - Posted in Debt, Mortgage

As the market shows falling mortgage rates, statistics show that the possibilities for real savings has increased more by using a home equity mortgage as a debt consolidation tool.

Homeowners who have paid down a certain portion of their existing mortgage will have built up some equity against which they can easily get a debt consolidation loan. Be aware of the fact that your house will be kept as collateral against the loan. You should not miss your monthly payments to the debt consolidation company otherwise your house will come under risk.


Most of the people go for debt consolidation because they want to lower their monthly payments by getting a lower interest rate from the existing ones. The repayment plan can be simplified by putting all the multiple payments under one. Many people find it easy to stretch the payments over a longer period of time to ease the pressure on the monthly budget.

When you are getting lower interest rates by consolidating your debts under one payment plan, the mortgage industry has been going down and that’s why the rates are so interesting. Mortgage rates have fallen from 6.74% to 6.45% in the last year. The longer this trend continues, there will be more opportunities for savings by consolidating debts into a home equity mortgage. This can just be the cure for many Americans overwhelmed by their existing debt problems.

1 Comment