Who is To Say You Cannot Apply For a Mortgage Loan ?

So even if you have a previous bad credit report, you will still be able to apply for a housing loan.

Have a good talk with any of the loan representatives.  As this market is very competitive, you should be able to find a suitable one.  However, the only thing is the premium will higher than for a person with good credit standing.

In any case, you can still reconsolidate / refinance / remortgage your existing loan.  Just be sincere in answering all the queries.

Of course, if you have intention to default again, please do not do it as it will be very detrimental to your records.

Everything You Need To Know About Remortgages

A mortgage is a type of a loan or lien that is given by a bank or some other financial institution against some piece of property. The loan is supposed to be cleared off within the time frame allotted, and until then the lending institution remains the owner of that property.

Remortgaging is the process of renegotiating the current mortgage with the institution; i.e. renewing the loan with the present financial institution or finding another lending company to help in buying out the present mortgage loan. It is basically a contract of repayment that is advantageous to the current owner of the property. Obviously, the best mortgages are the ones with interest rates that are lower than the property owner's present mortgage rates.

One needs to take care of a few things before applying for a remortgage. There are a lot of things one should check, like the best quotes for interest rates. People who have good credit scores receive low interest rates and the ones with bad credit histories receive high rates, so the ones belonging to the latter group should be a little careful when looking for refinancing deals.

Fees are also attached with remortgaging. There are many financial companies that may not charge fees whilst some who will charge very less. If it’s a new lending company that you are with you might have to pay appraisal fees because the mortgage company will have to appraise the property to see if and how the value matches the amount for remortgage.

Note that the owner of the property should actually remortgage if the process allows him/her to save money. If the amount is not too huge, the owner can look for lending institutions who don't charge fees. The process of remortgaging actually saves money in a monthly basis due to a decrease in the interest, payment and the duration of the refinancing.

Once the owner of the property zeroes in on a particular lending company after deciding on the interest rates, expenses per month and the credit history as well there are a few processes that need to be followed to complete the step of remortgage.

1. Proof of Employment. All kind of earning statements are to be submitted. If there are any other sources of income like trust fund, money won in lottery, etc are also to be shown.
2. A statement of expenses is also to be submitted. The income and expenses, monthly and annually should meet the guidelines of the lending company.
3. Examination of credit history is done after which an appraiser is sent to the property to determine the value of the remortgage amount.

After these steps and the completion of paperwork at the lending company the remortgage loan is approved.

Whatever the case may be, always do your math so that you will end up with repaying a lower interest that is less taxing on yourself.

The Right Mortgage Loan

Buying a home is probably one of the biggest property investments you will ever make. In addition to finding the right home at the right price, you also need to find the right home mortgage loan financing.

Whether you are a first-time homebuyer or a seasoned investor, finding the right deal can be a trying process.

Questions like the following will probably pop up in your mind :

Where should I start to look for a mortgage loan ?

What is the right mortgage loan for me?

Which company offers the best rates ?

The right mortgage loan for you will vary based on your unique situation and your financial comfort.

There are many options available :

Fixed rate mortgage loans - Lock in a low fixed rate that is guaranteed to never change. Popular terms include 15, 20, 30, and 40-year loans.

Adjustable rate loans - Flexible loan terms for your short-term goals.

FHA mortgage loans - Guaranteed by the government, FHA loans offer low down payment options and more flexible guidelines than traditional mortgages.

Low downpayment loans - Buy property with less than 20% down.

Vacation and investment mortgage loans - Loans specialized for the mortgage investor.

Ensure you do adequate research as you are going to be the one who will ultimately have to bear due consequence on whichever type of  loan you eventually decide to take on. You may end up with more than you can chew if you run into bad credit and have to look into mortgage refinancing again.

Some Basic Home Loan Tips You Should Take Note Of

Here are a compilation of tips you should take note of when going for a home loan, having gone thru one myself :

1) A home mortgage / equity loan is one of the cheapest loan you will ever get. As such don't pay it off early. Your strategy should be to borrow as much as possible, for as long as possible and pay it off as slowly as possible.

Be sure that you pay all other borrowings before paying down your  home loan -- (since all other debt is more expensive).

2) No bank announces that the lock-in has ended and rates are going up. None informs borrowers there is a way to avoid the automatic rate increases -- and lower payments to the bank.

3) When you move your home loan to another bank, it is called "refinancing". When you keep your home loan at the same bank, it is called "re-pricing".

After the lock-in has ended, do one or the other -- refinance or re-price your loan. Continuing with the home loan after the lock-in period is almost always more expensive than refinancing or re-pricing.

4) It is often worthwhile to re-price with the same bank to avoid legal and other fixed costs from switching.

Tell your bank you intend to re-price. You may be surprised by the bank's attitude. It will not be offended. It will become more friendly and helpful since they don't want to lose your business. To keep you as a customer, the bank will come up with an attractive re-pricing package.

5) You will get the lowest rates by bargaining. Two good ways to increase your bargaining power are: (i) Don't refinance alone. Do it with a group of friends. (ii) Shop around. Show banks the lowest rate you find -- and then ask if they can improve on it.

6) A common sales pitch is “free partial repayment” within the lock-in period. It is not as special as it sounds since you cannot finance the partial repayment with a bank loan. You must make the payment with cash or otherwise.

7) Nearly all banks are willing to go lower than their published rates.

Most acknowledge that their quoted rates are “subject to negotiation” and “the relationship manager may be able to lower rates further”.

8) Be especially wary of one-time offers. A marketing gimmick is for banks to tell customers about “special offers that have not yet been made public”. The deals are supposedly reserved for "special customers like you".

While it is correct that the offers have not been advertised, they are often complex and usually more expensive than a simple pegged-rate home mortgage / equity loan.

If you have any interesting tips to contribute, feel free to do so !

Never Take Things in Life For Granted When Applying For a Loan

For my readers :

Just a short advice :

Never take things for granted.

If you are out looking for a mortgage or home equity loan, do your due diligence in understanding what it is, what it entails to take up such a loan and lastly ensure that you are able to repay your monthly instalments on time and not let it lapse.

Do your due diligence or you may end up with more than you can handle, for instance, defaulting and given a bad credit report or even a repossession of your property by the lending institution.