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Archive for May, 2009

How To Borrowing Against Your House

May 31st, 2009

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Borrowing against your home has pro’s and con’s and before you proceed with any refinancing you need to consider them both.

The money you can borrow on the one hand will have a lower interest rate than other loan sources and can help reduce your monthly repayments to clear other expensive debt. Spreading the term of repayment over a longer period will make an impact on reducing your monthly debt.

From your budget determined how much outstanding debt you are paying. Next calculate what the payments would be under one loan against your house if they were all consolidated. The best decision to make will show to help you control your debts more easily.

If house prices are rising in your area, your increased equity in the house will allow you to borrow against it since the date of your original mortgage.

If you are already struggling to make a mortgage payment, then the downside loan refinancing will put your house on the line and at risk losing it. If if it looks eminent that the bank will foreclose on your loan then it would not be wise to increase your borrowings.

If your calculated payment will not make the additional mortgage payments then it may be better to sell off other items that had been borrowed against to decrease debt elsewhere instead of possibly losing your home.

Another option would be to downsize on your home and buy  a house of lower value to reduce your mortgage amount while you are getting back on your feet.

For most people the home is the most valuable asset and  always do all you can to keep ownership of it.  And carefully considering all your options before borrowing against your house will save you the embarrassment of losing your home.

Adam Till enjoys freelance writing and internet marketing.

Signup for a debt management newsletter and a free “Ways To Boost Your Credit Score” Guide, visit http://debtcarenews.com Also, learn how to deal with creditors at http://www.debtcarenews.com/recommends/debt-consolidation/

Article Source:http://www.articlesbase.com/mortgage-articles/how-to-borrowing-against-your-house-941905.html

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Relationship Between Credit Rating and Credit Repair

May 30th, 2009

There is a relationship between credit rating and credit repair. If your credit rating is 600 or below, credit repair is needed so you will always be in good standing.

But what is a credit rating? This is an indicator that tells creditors if you are credit worthy. A simple way of doing this is to encode certain things about you in the computer and within seconds, they will see the results appear on their screen.

Credit rating ranges from 350 to 850 and as mentioned earlier, a score of 600 or below is bad because if you apply for a loan, you will be paying higher interest rates compared to someone who has a good rating of 700 or above and this is usually based on 5 factors.

First, the number of inquiries you have made in the past 2 years. Did you apply for a loan or a credit card? If you did and this was approved, then as long as you pay it on time, you will have a good credit rating.

Second, what types of credit you actually have? If you have funds, then that is good. If you don’t, well don’t expect to have a high credit rating.

Third, what is the length of your credit? People who have a line of credit for 5 years or more have a better credit rating compared to someone who just graduated from college.

Fourth, how much is your debt? It is okay to have debt once in a while as long as you are able to pay for it. If you don’t owe money to anyone, then good because this will be reflected on your high credit rating.

Lastly, what is your payment history? This is somehow connected with your length of credit because this will show if you have been able to make payments on time. If you missed a payment that could be bad but if you have not, then you should have a good credit rating.

All these five factors are equally important. So you can see if you have any problems, get a credit report from one of the three crediting agencies namely Equifax, Experian, and Trans Union.

You can get a copy from each one at the same time or do it at different times of the year. This report changes so you should obtain a copy annually.

One thing you might notice looking at the different reports is that they may not always reflect the same thing. When this happens, don’t be alarmed because each one uses a different set of protocols in coming up with those figures.

However, should something there be outdated or mistaken, this must be corrected. If you have the supporting documents, write a letter and send this to the credit agency.

If what the report says its true and you are in a lot of trouble, then steps have to be taken to initiate credit repair. You can do this by yourself or with the help of a counselor.

Regardless of who is involved, only one thing is certain and that paying off whatever outstanding debt you have is the only way to improve your score.

Don’t expect that your loan application will be approved if you credit rating is not very good. Do something about it because credit repair is your only option.

Sutiyo Na is an internet marketer and writes on Financial, Sport, and Health. Find out more articles on Managing Your Credit Score and Dealing with Mortgage Refinance
Visit :
www.creditreportresource.info and www.mortgagerefinanceadvice.info

Article Source:http://www.articlesbase.com/mortgage-articles/relationship-between-credit-rating-and-credit-repair-945944.html

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How to Avoid a Bad Credit Score

May 30th, 2009

Credit repair is the process of fixing your current credit standing to make things favorable for you in the future with credit companies and financial agencies. Regardless of what you file, a mortgage, a loan perhaps, or even a credit card, your finances will be checked by the credit card company, bank or agency.

They will determine if you have a good credit standing and checked the financial risks involved and then they will decide if they will grant you the credit that you applied for and site the specific conditions involved if they do decide on your favor. If they approved your loan or credit card application, then that means you have a good credit history. There is no need for a credit repair if you have a good credit standing and stable finances.

However, in order to achieve such standing you better avoid the things that will lead you to a situation where you will be buried by your debts. Practice a simple lifestyle that will give you a sound financial status. The most basic of course is to make sure that you meet the bill payments on time. Your credit card bills would be the first that you need to control and maintain.

If you use your credit cards, settle the credits on time. This will show the credit company that you have no intention of defaulting on your loans and you are a responsible creditor. Credit card agencies will give you a positive credit rating and will give you a good deal on your loans or give you a credit card with a high credit limit.

I can only stress the importance of paying bills on time. It is said that about 30% of your credit score is based on how you settle your debt payments. You will have a better chance of meeting the bill payment deadlines if you create a payment plan where you outline your goals. This will help you pay bills on time.

Another thing that could help you avoid a bad credit score is by not maxing out on your credit card. Credit agencies determine your credit score also by the available credit you have remaining. Believe it or not having the unused credit increases your credit score. So even if you have credit cards that you’re not using do not close or forfeit those cards.

They can help increase your credit scores. The length of time you have a credit line open in an agency is also interpreted as having a good relationship with that company. This also brings in positive credit rating which is another good reason for you to keep cards unused or sparingly used as much as possible.

Also, do not apply for more credit cards if you already have outstanding card payments to begin with. Every card application will reflect on your ability and responsibility to manage or handle debts. Increasing your credit scores is a good way to reestablish your financial stability for your creditors and future financers as well.

Measure the way you spend and if you find that you can’t control the use of credit cards, then you might think of more drastic ways to alter your lifestyle. A severe intervention might be solution such as contacting your credit card company and lowering your credit limit if they gave you a high one.

Managing your finances to achieve financial stability and independence is necessary to maintain a good credit standing. There is no need for credit repair if you keep within your credit and financial goals.

Sutiyo Na is an internet marketer and writes on Financial, Sport, and Health. Find out more articles on Managing Your Credit Score and Dealing with Mortgage Refinance
Visit :
www.creditreportresource.info and www.mortgagerefinanceadvice.info

Article Source:http://www.articlesbase.com/mortgage-articles/how-to-avoid-a-bad-credit-score-945946.html

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Financing Rental Properties? Learn How to Shrink Your Loan Now

May 30th, 2009

Financing rental properties is always a risky business for your lenders, so it’s only natural that they will take time to evaluate your ability to pay your debts before handing you their money. If you can prove yourself to be trustworthy and reliable, you will definitely be enjoying lower interest rates and better terms on your mortgage loan.

Apart from proving yourself to be a dependable borrower, there are additional strategies that you can use to slash the cost of financing rental properties. Read on to uncover these tried and tested methods:

Take Quick Steps to Brush up Your Credit Score

Your credit score is one of the major factors that lenders will use when determining your eligibility for rental property financing.

A credit score in the mid range of 620 to 750 can land you a decent deal, while a score of 750 or more will get you the lowest interest rates and open your world to a wide selection of willing mortgage lenders.

In general a credit score of less than 620 will banish you to the sub-prime market, making it hard for you to obtain financing. Even if you do manage to get your hands on a mortgage loan, you can expect the interest rates to be unfairly high. If your score is less than 620, it’s important to take steps to improve it before financing rental properties.

There are few quick fixes that can boost your credit score relatively quickly. Firstly keep all your old credit and financial accounts open. The age of your accounts plays a part in your credit score.

Second, always pay up your bills on time. Even a single late payment can have a big impact on your score. Third, avoid opening new accounts right before you apply for rental property financing. Excessive inquiries for your credit report can make you look risky to lenders.

Finally, pay off your balances to 50% or less of your total credit limits on your revolving accounts.

Save up so that You Can Afford a Larger Down Payment

It is highly tempting to pay just 5 percent down payment that has become almost the standard with mortgage loans these days. But a traditional down payment of 20% will save you a lot of money in the long run.

Lenders know that you will be less likely to default if you are investing a significant chunk of your own money into the rental property. Because of this, you will enjoy lower mortgage rates avoid having to pay extra for private mortgage insurance when financing rental properties.

Be Wary of Any “Zero Cost” Rental Property Financing

If you find a lender offering you a mortgage loan with no closing costs, make sure you study the terms carefully.

Most of the time, a mortgage loan will cost you a few thousand dollars out of pocket for agent, legal, transaction and closing costs. However, lenders sometimes try to lure customers with “no cost” financing with the catch being a slightly higher interest rate.

It is enticing to pay less cash out of pocket upfront, but if means having to endure a higher interest rate, you will actually be forking out much more in the long run.

Consider an Offset Mortgage to Lower Your Interest

Another way of slashing your interest when it comes to financing rental properties is to take on an offset mortgage.

Like the name suggests, an ‘offset’ mortgage requires that you open a savings account that is tied to your mortgage balance. In essence, the account in that savings account acts as collateral to offset the balance of your mortgage and you don’t have to pay any interest on the amount held in linked savings.

For example let’s say you have a mortgage of $100,000 and  $20,000 in a linked savings account. You won’t be earning any interest from this $20,000 savings account. Instead you will be only paying interest for $80,000. Since mortgage rates are often higher than saving interest rates, an offset mortgage can often save you a lot of money.

To sum everything up, there are many ways for you to save money when financing rental properties. Showing the lender that you are a trustworthy borrower and making the right financial choices will ensure that you get the best possible terms and rates on your rental property loans.

Teo Zhenjie has been showing landlords how to manage their tenants and rental property effectively on Propertydo http://www.propertydo.com/ – To learn more important tips on financing rental properties, visit his website today for step-by-step real estate guides, free resources and forms.

Teo Zhenjie has been showing landlords how to manage their tenants and rental properties effectively on Propertydo.com http://www.propertydo.com/ – Visit his website today for step-by-step real estate guides, free resources and forms.

Article Source:http://www.articlesbase.com/mortgage-articles/financing-rental-properties-learn-how-to-shrink-your-loan-now-945562.html

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How to Make a Foreclosure Purchase

May 30th, 2009

Rules on foreclosures vary from one state to another but the processes and transactions are basically the same.  The process of foreclosure begins whenever homeowners fail to make payments on their mortgages.  Once this happens, the bank informs the homeowner as well as the local government that there is a delinquent loan.  There is a period of time that the bank must wait for payment after which they will be able to begin the process of repossessing the property and eventually auctioning off the home to the highest bidder. 

All throughout the process, which takes a number of months in some cases, the homeowner has the right to make up for their missed payments and get back on track with their mortgage.  There are times when the homeowner will choose to just sell the property to a private buyer to try and keep the equity that is left in the home.

When a homeowner buys a property they are protecting the amount of money that is borrowed from the bank with the property.  When the bank is not getting their payments, they have a right to take possession of the property and sell it to try and recoup their money.  This process will usually cost the banks in the long run. A bank is not able in most cases to handle property and sell homes.

This will mean that someone who is looking to take advantage of this property should look for homes that are in the pre-foreclosure stage.  This is a good way to buy a home at a substantial savings.  There are more tips on finance at http://www.fidetips.com/finance for you to read.

The pre-foreclosure time period is during the time when the bank is preparing to take possession of the property. There are different laws in all of the states about how the bank takes possession of a home. The time period will vary from state to state as well. When the pre-foreclosure time period is ended the home will be auctioned on the courthouse steps and this is where many investors go to find properties that they can buy.

If you are looking to invest in a home that is in the pre-foreclosure stage, you will have to act before the home is in the public auction stage. During the pre-foreclosure period the investor can begin to negotiate with the homeowner to create a deal that is suitable to both parties. This is a good way to invest in a property without having to bid against other investors. You will still get a good deal on the property and you will not have to go through the auction process.

There are a number of tips and techniques that should be used when you are investing in properties.  You should also do the research online, like going to the search engine websites.  If you are planning to make an investment in these types of properties, you should make sure that you are knowledgeable about the details of these transactions. The successful real estate investor is one that is able to quickly assess the value of a deal that they are making in one of these properties.

Teeny is a writer for finance, computer, travel, cars, shopping and other subjects for many years, please visit http://www.fidetips.com/finance for more information.

Article Source:http://www.articlesbase.com/mortgage-articles/how-to-make-a-foreclosure-purchase-945921.html

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