Choosing Your Lender For Refinance
Posted on October 29, 2008
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Usually when a person goes down the winding road of refinancing their current mortgage they are looking at lenders other than the one they are with. The majority of the time, the whole idea of refinancing is to save money, right? And lenders are in the business of making money, right?
So, it only seems obvious for you to avoid dealing with your current lender because they are going to lose money on a refinance deal, right? Maybe not.
You may actually find the lender more than willing to work with you on refinancing. Why? It is simple. If you refinance your Loan somewhere else then your lender is losing big time. If they refinance the Loan for you then they are only losing a little.
See how it makes sense to consider your current lender when refinancing your home? It is a pretty simple idea that most people do not think about and it is an idea that may just get you the best deal. They might even offer you a better deal than you hoped for hoping to keep you as a customer.
Avoid Foreclosure and Save Your Home
Posted on October 16, 2008
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Most people start playing the dodge and run game when they become delinquent with a creditor. This is one of the worst things a person can do, though. Running away from a problem doesn’t solve anything.
When you are facing foreclosure the best thing to do is talk with your lender. To be honest, the lender really doesn’t want your home. They are not in the real estate business; they are in the money business. They want money, not property.
The lender is going to be more than willing to work with you, but you have to talk to them. You have to be honest and explain why you are having problems. You may be surprised at all the options the lender will give you, especially if you have been good about your mortgage up to this point.
So, if you run into trouble on your mortgage payments, don’t run and don’t hide. Take a minute to talk with your lender and work out something so you can save your home and save your stress levels.
Doing The Math On Loan Interest, A Vital Step
Posted on August 22, 2008
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Interest can be confusing. Trying to figure out how much a Loan is costing you is something you want to do, but many people say “Forget about it.” when they start trying to do the math.
The problem with figuring interest is that it is not always calculated the same. You have to begin with reading the terms of your Loan agreement. You should be able to find out exactly how the interest is calculated in there.
To give you a basic idea, here is the formula for figuring interest for a one month period. The Loan amount is $1000 and the interest rate is 5%.
Multiply $1000 and 5% (which is equivalent to .005)
The answer is $50, which is the interest you would pay for that month.
You may be thinking that is easy, but you usually have a Loan for longer than one month. So you have to figure interest for each month in the life of the loan. There’s also a big factor called compound interest where you’re paying interest rates on the interest accrued.
Sometimes it is easiest to go to your lender and have them figure it for you. This is really important in terms of understanding the full scope of a loan. It will save you some headache in the long run and it’s a service your lender should offer…to show you everything detailed in black and white.
Is Your Best Bet An FHA Loan?
Posted on August 17, 2008
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There are so many home Loan types that it can be rather overwhelming to know what to do. An FHA Loan is one of the first places you should go if you meet these requirements:
- have 2 years of steady employment
- fairly good credit rating
- need a low down payment
- are a first time homebuyer
An FHA Loan is a government sponsored Loan that enables you to get a home loan from lender that you can afford. It is a great option for a person who may be having difficulties coming up with a down payment.
Under an FHA loan there are many requirements and guidelines, though. It is best to discuss an FHA loan with a loan specialist because they can completely explain the ins and outs of the loan.
For now, knowing why an FHA loan is worth looking into can help you get started on the right track.
A Good Reason Equals A Smart Loan
Posted on July 15, 2008
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Have a good reason to get a Loan. That is some solid advice that you should not take lightly. There are two main reasons why you should always have a good reason for a loan.
The first reason is that it gives you a goal. You know where the money is going so you will not simply waste it away and spend it frivolously.
The second, and more important reason, is that the lender is more likely to lend you money when you have a good reason. A lender wants to know what why you need this money and why a loan is the best way you can get it.
Without a good reason the whole purpose of getting a loan seems trite. A typical lender who will give a great interest rate is not going to be likely to just hand you some money blindly. Furthermore, why would you borrow money without a purpose? Unless you are simply borrowing in order to improve your credit score—that could be a great reason.
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Looking At Your Own Bank for Loans
Posted on June 9, 2008
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The idea of shopping around for a Loan can sometimes be over rated. It is a good idea to see what your options are, but you shouldn’t miss the trees for the forest, so to speak.
If you are already doing business with a financial institution then it makes the most sense to go to them when you need a Loan. You already have an established relationship and they know what type of person you are. You have already won half the battle when you use a financial institution you already do business with.
You will likely be able to negotiate with them better because they do not want to lose the business (of your custom) that they already have. You can also use your current good standing with them to prove you are reliable and trustworthy.
It often makes a lot of sense to go to someone you already do business with rather than strike up a whole new business relationship. Talk to your financial institution and see what kind of terms they can offer you.
Don’t Let The Terms Get You Down
Posted on May 26, 2008
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Loan terms look like a tangled mess sometimes. It can seem like a hassle to try to read all that fine print. It is a big mistake, though, to not read a Loan contract.
Many people believe that defaulting on a Loan means only missing a payment. That is not true. Defaulting on a Loan technically means failure to meet the terms of the loan agreement, which does include payment, but also much more.
You have to make sure that you clearly understand all of your obligations under a loan. Do not sign a contract if you are unclear about anything.
Bad terms can really get you down and cause you a lot of trouble. If you do not agree with every term of a loan contract then do not sign it.
The money is not worth the trouble that will come back to haunt you if you default so be sure you know what you are signing up for!
3 Things That Will Qualify You For A Loan
Posted on May 15, 2008
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It can be confusing trying to figure out all the factors a lender uses to qualify you for a Loan. While there may be many things a lender looks at when deciding to give you a Loan, there are really only three things that are going to matter.
- collateral
- credit
- income
A lender is always thinking about getting paid.
They want to know you will pay them back. If you have good collateral to put down on the Loan then the lender likes this because they know if you default they get that collateral. They like to see good credit because it shows you pay back your debts. They also like to see steady and stable income so they know you have the money to pay them back.
The bottom line in qualifying for a Loan is that if a lender can not be certain you will pay them back then you will not qualify. It really is that simple.
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Facts About Loans
Posted on May 11, 2008
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Loans are normally, but not always, a financial arrangement where a sum of money is lent to another person; once complete it becomes a legally binding contract. Lending money has been around since it was invented although people and other goods or services have been lent to others for longer but as the majority of these are for money; this is what this article is about. Loans are required to be paid back and this is normally within a period set at the commencement of the contract; normally repaid in regular amounts, which can be on a monthly, but sometimes three monthly basis.
Generally speaking when debts are provided by family members, no charge for this service is made but usually the person providing the money needs to be compensated and this is done by adding an interest charge to the amount owed. Some companies add the interest onto the repayments but make sure this is the first part to be paid so a number of monthly payments might be required before the capital repayment actually starts to be paid. However the normal way to repay a debt is to ensure that each monthly repayment combines part sum and part interest.
Acting as the provider is one of the principal tasks for financial institutions. A loan is a simple way for many people and businesses to have a sum of disposable money in the bank (it’s just the amounts that differ); whilst other ways to raise capital can be used, this is often the quickest method.
Arranging a mortgage, whilst a little more complicated, is in essence the same but the use for which it is required is not flexible and the money can never be used for anything other than buying a house or land. In this instance, the lender is given security on the money advanced in the form of the title deeds of the house until the debt is repaid in full. With this type of loan, should the borrower fail to make payments on the loan or default, then the bank or other financial institution has the right to sell the property; although selling the property is one option, keeping it as an investment is another.
There is nothing to stop any lender asking for the loan to be secured and this can happen when a car is bought using this method; in this instance, the car becomes it’s own security for the debt. To ensure that the finance company does not lose money, secured loans on cars are normally short term; in this case money lent for a car will have a relatively short repayment period.
Unsecured loans are available from financial institutions under many different guises or marketing packages; this can include the credit card, personal arrangements, bank overdrafts and other forms of credit. The interest rates applicable to these different forms may vary depending on the lender, the borrower and the type of credit supplied.
Abuse in the granting of money is known as predatory lending; it usually involves providing cash in order to put the borrower in a position where one can gain advantage over them. An easy way to do this is for a credit card company to issue cards to individuals and encourage them to use the cards and then keep them paying these amounts off for a long time because they have such high interest rates. Take a step back before you sign any financial agreement.
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Reasons Why Bad Credit Equals High Interest
Posted on May 7, 2008
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It is often confusing why lenders would charge higher interest rates to someone with bad credit. A person with bad credit does not need the higher payments on a Loan that come with higher interest.
It seems more rational to charge a person with bad credit lower interest so the payments can be more affordable and they are not stuck in the Loan for so long. However, there is very good logic behind the lender charging higher interest rates to bad credit borrowers.
When a Loan payment is made only part of that payment is paying the actual Loan balance. The majority of the payment pays the interest and that is money directly in the lender’s pocket.
The lender isn’t stupid. They know that a person with bad credit is more likely to default on the loan, so they charge higher interest so they can get more money in their pocket right now just in case the borrower defaults.
Now that is smart lending.
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