Second Mortgage & Bad Credit Loans

Jul 13 2020 Published by under Uncategorized

Do you have a low or bad credit score and are in need of a loan and have faced rejection from the banks and other lenders? If you want to consolidate debt, complete home reno’s, payoff credit cards or whatever the case may be, second mortgages are an excellent option that can help you out now and in the future. By consolidating your debt with a second mortgage and eliminating all of your credit card debts and other consumer debts you will be making some serious improvement to your credit rating.

The bank puts a lot of emphasis on your credit score when determining whether or not to give you a loan, as you may have already found out, if your credit score is below 650 you will likely have trouble getting a loan from the bank. As mentioned above, using a second mortgage to consolidate your debts will “clean up” your credit report and make significant improvement to it. You need to look at it as a stepping stone process, where you consolidate your debts with the second mortgage, then continue to rebuild your credit, and then refinance the first and second mortgages into one new low rate first mortgage with an institutional lender like a bank.

Finding a second mortgage bad credit loan can be difficult because finding a lender to take on this more risky position can be difficult. Speak with an experienced mortgage broker in your area and you will receive professional advice and service, and can feel confident that you have a solid financial plan.

Mortgage brokers have access to many second mortgage lenders to find you the best second mortgage rate possible. Your broker will thoroughly inform you on the lending terms and the financial plan to refinance you out of the second mortgage into one new low rate mortgage that you may not currently qualify for with your current credit score.

Second Mortgage lenders do not put as much emphasis on your credit score as an institutional lender like a bank does. However, a second mortgage lender still wants to see that you can service the loan and may require that the some or all of the second mortgage proceeds are used to payoff other high rate debt.

Get A Second Mortgage To Refinance With Bad Credit

So how does a second mortgage work? The second mortgage lender is mainly concerned with the amount of equity in your home because this is what the loan size is going to be based upon. The lender will only lend up to a certain loan to value ratio which is often around 80%, with some lenders going as high as 85%. What does this mean to you? If you own a $300,000 home, and you currently have a first mortgage of $200,000, this mean the second mortgage lender will be willing to provide you with up to $40,000 as a second mortgage secured against the home ($40,000 + $200,000 = $240,000 which is 80% of the home’s value ($300,000). To start the process you will need to fill out an application and have an idea of the approximate value of your home. If the mortgage broker feels you can qualify for a second mortgage the next step is to review your credit report and order an appraisal on the home. The second mortgage lender will require an appraisal to be completed on your property by one of their approved home appraisers and you will be responsible for the cost of the appraisal which averages around $300. Once the appraisal is completed and there are no significant issues with the home, then the second mortgage lender will issue what is called a mortgage commitment which will have all of the terms of the loan and it is your mortgage broker’s responsibility to ensure you fully understand the terms. If you agree with the terms of the loan, then the next step is to have everything sent off to a lawyer to finalize the transaction. This is the same process as you went through when securing your first mortgage. The lawyer will finalize the transaction for you and once everything is completed he or she will then release the funds to you.

How can a mortgage broker help you? Brokers have relationships with Bad Credit Second Mortgage Lenders who will work with homeowners to provide as much LTV as possible, and have helped many clients get second mortgages in order to access equity and take care of financial emergencies.

Can You Refinance A Second Mortgage?

Yes! refinancing out of your second mortgage once your credit is better is critical and must be planned for, second mortgages are often short terms of 1-2 years. You should not plan on renewing your second mortgage, if the funds are used properly from the second mortgage you will be able to combine the two mortgage loans into one new first mortgage with an A or B lender by the time the term is up. You must be aware of the costs of doing this, if you are breaking one of your current mortgage terms to do this refinance, make sure you calculate the penalty of doing this into whether it is worth it. You will also be looking at more legal costs and possibly a new appraisal but more often than not, refinancing the two mortgages into one is your best option as second mortgages often come with a high rate.

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Get a Bad Credit Home Mortgage Loan Today

Jul 13 2020 Published by under Uncategorized

Being approved for a bad credit home mortgage loan is not impossible. In fact there are a few lending institutions that specialize in this kind of loan for people that are not qualified for loans with major financial lending institutions. This kind of loan is especially tailored for people with less-than-perfect credit, but will have still have some qualifying terms that the borrower will need to qualify for.

There are two types of bad credit home mortgage loans. The first is for people that are looking to buy a home. The second is for people that wish to refinance and existing mortgage. To qualify for either type of loan the borrower is going to have to show proof of being able to repay the loan. This involves showing that the borrower has a stable job and has been employed for a certain minimum amount of time. The lender will also want to see proof of the level of income being made to ascertain whether the borrower can actually afford the loan or not.

If you think you qualify for such a loan then getting approved is not that hard if you just show the lender the proper information. Lenders that offer loans to people with bad credit try to first ascertain why the person has such a low credit rating. Often people run into major expenses such as unexpected medical bills, costs caused by natural disasters and family crises. This can make it impossible for people to pay their credit cards or loan payments and so results in them getting a bad credit rating. This kind of situation is really not that uncommon, and these lenders know that these people are only in a temporary bad situation but have the income to normally make their loan payments and are willing to lend money to these people although at a higher interest rate.

When a person loses their job for a short time because they are looking for a new job, or the company they work for is in some kind of financial trouble, can sometimes benefit from a bad credit home mortgage loan. Often a lender will allow the person to refinance their mortgage so that they can lower their monthly payments by extending the loan period. The borrower gains because refinancing can be used to pay all past due payments and even put some badly needed cash in the pocket of the borrower. The lender gains by providing a loan at a much more profitable interest rate.

The greatest long-term benefit for the borrower with bad credit is that by making regular payments on their new loan for a reasonable period of time, it will strengthen their credit score. This better credit rating will then allow the borrower to refinance the bad credit home mortgage loan at a better interest rate in the future.

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Home Refinancing for People with Bad Credit – How to Avoid High Fees

Jul 13 2020 Published by under Uncategorized

Avoiding high fees when home refinancing with bad credit is as

important as finding low rates. With fees adding up to thousands of dollars,

make sure that you are getting the best deal by comparing lenders. Also

look at other types of credit to securing cash out financing.

Ask About Closing Costs And Fees

To save yourself money, research lenders before settling on a refi

loan. Request loan quotes that include information on closing costs and

fees. The APR will include the interest rate, closing costs, and any

annual fees. But be sure to also ask about early payment or any other fees.

Be aware of fees or closing costs that are included as part of the

principle. These are often labeled as “zero down” loans, but in reality you

are paying for those fees throughout the loan.

With loan quotes, know that even the fees are negotiable. You can ask

for them to be removed or eliminated. Some fees, such as the early

payment fee, are only removed if you pay an additional amount at closing.

Select Low Fee Terms

While you are researching financing companies, also take a look at how

they structure their loans. Often the lowest rates, such as interest

only or balloon payment loans, have the highest fees.

Select terms that are more favorable for low fees, such as fixed or

adjustable rates. Adjustable rates are usually the lowest costing loans

with some risk of increasing future rates.

Other Ways To Cash Out Your Equity

If you are simply refinancing to cash out part of your equity, consider

applying for different types of credit to save on fees. Second

mortgages and lines of credit have much lower closing costs than refinancing

your total mortgage. They can also be held for a shorter period, which

also saves you money.

While low fees may be your goal, be open to better financing options.

By comparing the APR, you may find that average fees can yield better

rates that will save you money. The longer you keep your loan, the more

important low rates will be.

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Securing VA Home Loans With Bad Credit: Tips For Approval And Qualification

Jul 13 2020 Published by under Uncategorized

For former members of the military, the challenge of adapting to civilian life can be quite acute. It is a common thing to see those who have left the military, either because their tour ended, they suffered disability or a simple decided to retire, to struggle. But when buying a home, the availability of VA home loans with bad credit means there is a financing option available to them.

The military holds a special place in the lending industry, with a variety of incentives offered to present and former members seeking loan funds for whatever reason. But securing mortgage approval from the VA depends on more than simply membership.

So, what are the criteria needed to secure approval on a VA home loan? What can be done to increase your chances, and where can they be secured from? Here are some factors that address those questions.

Qualifying For VA Financing

Those that qualify for financing from the VA are former members of the military. But that is not to say that any former member will get the green light. Securing a VA home loan with bad credit comes down to satisfying 3 key conditions.

Because those seeking mortgage approval from the VA often have incomes that are not military related, there is every chance they have suffered some bad financial experiences. The VA wants to be sure they are not supporting a major financial risk.

As a result, applicants cannot have defaulted on a loan in the previous year, cannot have bankruptcies on file within the previous 2 years and must have proof of gainful employment. Once these criteria are satisfied, then a VA home loan is on the cards.

Other Considerations

The definition of former military members is not as clear cut as it would seem, with those unable to serve because of disability included in the group – at least by the VA. As a result, currently disabled or receiving benefits can apply for a VA home loan with bad credit.

Just as with any other loan, taking steps to improve your credit scores (even marginally) can make a huge difference to the chances of securing mortgage approval from the VA. The best way to do this is to clear some existing debt, or to at least be up-to-date on credit card and other bills. It may be worth taking out some small personal loans to deal with individual debts.

The advantage when seeking a VA home loan is that with each debt that is paid off, the credit score increases and the debt-to-income ratio is improved. The ratio is the key factor in any loan application. Get that right and approval is almost guaranteed.

Where To Get A VA Home Loan

Despite the title of the loan product, a VA home loan is not actually granted by the VA. They only offer their backing to the applicant, while the mortgage provider actually provides the funding. For this reason, it is necessary to find a suitable online lender to get the best possible terms.

However, the fact the VA is willing to sponsor the applicant means the terms secured can be very good, not least because the interest rates are lower. But getting a VA home loan with bad credit usually means no down payment is needed, and the VA guarantees 25% of the mortgage too.

With a reduced level of risk, lenders are happy to grant the mortgage. Still, look out for certified VA home loan providers. These are trusted VA partners, reducing the risk of being taken advantage of, and offering a greater likelihood of mortgage approval from the VA.

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Can You Have a Bad Credit Car Loan and a Bad Credit Home Loan at the Same Time?

Jul 13 2020 Published by under Uncategorized

Bad debt is sometimes inevitable. You could go broke because of a sudden illness, a divorce, losing your job or simply put, bad luck. Being in a bad financial situation is not a permanent situation. You can always get a new high-paying job, have a side business for extra income or simply get back on track with your finances.

Getting a loan is not that easy if you have a bad debt history. To be eligible for mortgage loans and finance loans, banks and lenders will require you to have a good credit history. The better your credit history is, the higher the amount of loan you can possibly acquire. Better interest rates are also given to clients with good credit scores. They are considered as low-risk clients.

Bad Credit Loans

Fortunately, securing a mortgage loan or finance loan is still possible even with bad credit. These are called bad debt loans. Secured home loans are secured loans with your property as your collateral while a bad credit car loan is a type of financial loan with your vehicle as your collateral for the loan.

Secured mortgages and finances are offered by specialist lenders that are willing to see beyond the blemishes in your credit file. Mortgage and finance specialists can also help connect you with the right banks and brokers that could help you secure a mortgage loan or a bad credit car loan.

Two Secured Loans at the Same Time

So, you have found a mortgage specialist and have managed to secure a bad debt home loan. Can you get a secured car loan afterward? Will an existing secured mortgage loan affect your chances of getting a bad credit car loan?

Yes, it is possible to have a secured mortgage and finance loan at the same time. A stain on your credit caused by a life event is something specialist lenders understand. The nature of your poor credit and the efforts that you are doing to fix your bad credit file counts the most for banks and lenders. This also helps you get your credit back on track.

The chances of getting a second secured loan, say a bad credit car loan after getting approved for a bad credit mortgage loan is possible. Fixing your bad financial rating is the best way to get a second bad credit loan. Paying off your debts and religiously paying for your loans, including your first bad credit loan creates a good impression for banks and lenders.

Going through the black marks and the outstanding defaults on your credit file, one by one does not only build your credibility as a borrower. It actually builds your credit. The more you get rid of these, the faster you can get them remove from your credit file.

Both types of loans are also secured loans. Failure to pay gives banks and lenders seize the collateral at stake – your home and your car. Getting a mortgage or finance specialist also helps in making a second secured loan possible. Experts like them can help you seal better interest rates and payment deals that will work for your budget – both for a mortgage and a finance loan.

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Home Equity Loans With Bad Debt: 6 Steps Before Getting a Loan Specialist

Jul 13 2020 Published by under Uncategorized

A bad credit score makes a huge impact on all types of loan. If you are one of those who has a bad credit but in desperate need to take out a home equity loan, know that it is possible for you to apply for a loan with bad debts. If you have started your research online, you may have already known that home loans with bad debt are possible.

Homeowners who have a great value on their homes have a better advantage and could have a greater opportunity of getting mortgage loans despite bad credit.

6 Steps to Consider Before Getting a Loan Specialist

1. Understand Home equity loans with bad debt

A home loan with bad debt may be used for making improvements or perhaps renovations on your home. This type of loan can offer interest rates which are much easier to manage compared to personal loans.

Note that loans with bad debt may impose higher interest rates as this type of loan are considered high-risk loans. Also, you need to have a good value for your home to be highly considered.

2. Find out which banks or lenders provide home equity loans with bad credit

Several banks and loan companies offer bad credit home loans. This loan type will have very specific conditions and qualifications that the borrower will have to meet. Compared to other loans with bad credit, a home loan has a higher chance of approval given that homeowners are using their home as a collateral.

You can start with your local bank and other lending companies in your area. When inquiring for a loan with bad debt, make sure that you have the latest copy of your credit report for them to check.

Important: Frequent inquiries on your credit history can further dent your credit standing so it is better to get a copy that you can readily show to banks and lenders when inquiring about mortgage loans.

3. Prepare the documents required to qualify for a home equity loan

First, get a copy of your credit file so that you can determine your credit rating. Having your own copy of your credit report will help you gauge how serious is your credit standing. There are many factors affecting a bad credit rating. At this point, you may want to decide what actions you should take to improve your rating before actually applying for a loan.

Gather all your financial documents for the lender to review. Financial documents include the following:

  • proof of income
  • your investments
  • other assets
  • current equity on your home

Consider looking at three or more lenders near you. Compare terms and interest rates to find the best offer.

4. Work on improving your credit standing

Despite the fact that some banks and financial institutions can offer an equity loan with bad debts, it is still a good idea to work on improving your bad credit. Find out if you can make use of a credit repair service. Avoid further debts as it may lower your chances of getting a loan for your needs.

Make sure that you know your credit history. Banks and lenders will ask you why you have incurred bad debts. Most bad debts are due to the declaration of bankruptcy or divorce. Considerations are high when you are doing something about paying off your bad debts.

5. Consider all your options

Credit unions. When looking for a home equity loan with bad debt, you have to look at all your alternatives. For instance, other equity loans with bad debt include credit unions or one that is connected with your company. These kinds of establishments may help with your loan needs based on your financial position.

Getting a cosigner. Get someone with good credit to cosign for the loan. This may appear like a simpler option compared to going through bad debt home equity loan companies. But this will take you some convincing that you can be trusted with the loan. Cosigners will take the same responsibility of paying off the loan in case you make a default and this scenario will damage both you and your co signer’s credit standing.

6. Get a loan specialist

A loan specialist can help you go through your options in getting a home loan despite bad debts. They can match you with home equity loan lenders who offer bad credit loans and may help you acquire a tax-deductible home equity loan at an interest rate with very few prohibitions. It’s crucial to note, however, that there are specific restrictions on claiming your loan as a tax reduction.

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