Even if you have tried hard all your life to keep a good credit score, this sluggish economy could have sent your score tumbling.  Even those hardworking people that always try to pay their bills on time may be struggling at times when the economy is so bad.  They may begin to find it hard to pay their bills on time and even pay their mortgage repayments.  This is a sad reality for many people even though it really isn’t their fault.  If you have fallen victim of the economy and are struggling financially then a debt consolidation loan for bad credit may be the answer.  If you’re credit score is low you may struggle to get a loan, but if you know how to, you can find the right loan.

It can be very stressful when you find yourself in a bad credit situation.  Then there are all those questionable lenders out there that will promise you a way out only as a way to get the little money you have left.  But there are also lots of good lenders that are willing to help people get through rough patches and land on their feet again.  Let’s take a look at some things that you can do to minimize the chances of being taken advantage of by the wrong lenders.

Firstly you need to be informed.  You need to know exactly where you stand financially.  Don’t just take a rough guess at where you are but sit and write everything down.  Record all the money you have, record your income and your expenses.  Write down how much debt you have, the interest rates and what your monthly repayments are.  Write down how much your repayments are versus how much you are actually paying.  Knowing exactly where you stand financially has two benefits.  Firstly it will be much harder for a questionable lender to take advantage of you and secondly it will prevent you from taking out a bigger loan that you actually need.

Next you need to read the small print before signing any contracts.  The terms of a loan must be fully disclosed by law but many lenders disclose all the terms in small print and most borrowers don’t read them.  All the lender is required to do is to disclose the terms; it is your responsibility to read them.  You need to fully understand every aspect of a loan before signing any agreements and if there is something you don’t understand then don’t sign.

There are many different lenders out there so shop around until you find the best loan to suit your needs.  It may take a little time and effort to compare lenders and loans but it is worth it long term.  Bad lenders will tend to pressure you to sign up for a loan right there on the spot but a good lender will be happy for you to shop around and let you take your time to understand all the terms of the loan.

Keep these points in mind when looking for a debt consolidation loan and you should be able to get a good loan with good terms.  Know your financial situation and understand the loan before signing any contracts and you will soon be on your way to a better financial future.

Bad Credit Debt Consolidation Loans is a post from: Debt Free Journey

What is a FHA loan?  FHA stands for Federal Housing Authority which is a national government organization that helps make it possible for American’s to live the dream and buy their own home.  Owning homes is good for society and the economy; it’s good for individuals and families so the FHA’s goal is to help everyone be able to achieve owning their own home.

FHA can help many people to be in a position to buy the home of their dreams.  The common term used by realtors for a FHA loan can be a bit confusing and even a little misleading and as such many people just have no idea how a FHA loan can benefit them.  The FHA doesn’t actually lend money to home buyers but instead a FHA loan is a type of mortgage protection or mortgage insurance.  The mortgage protection is given on a mortgage so that there is less risk for the lender.

When you find a home that you want to purchase you will need money to purchase it so usually you would go to a bank to see if you could get a mortgage.  When you find a bank with a good mortgage deal you will fill out an application and then the lender will look over your details and decide whether to loan you the money or not.  If the lender decides that they will lend you the money they will transfer the money to the seller of the home.  You will sign a contract with the lender in which you will agree to pay a monthly payment until the entire loan is paid in full.

That is a fairly basic outline of what is involved when purchasing a home.  However it doesn’t always run that smoothly and a lender doesn’t always agree to lend money, particularly if the borrower is high risk.  This is when a FHA loan can help.  The FHA will provide mortgage insurance on the mortgage to protect the lender if a situation arises and you cannot repay the loan.  When the FHA provides mortgage insurance the lenders are much more willing to loan money.  So with this mortgage protection, this is how the FHA can help people to live their dream and own their own home.

If you have had some credit problems and don’t have a very good credit history, but you would like to buy your own home then you may qualify for a FHA loan.  Not all lenders will work with the FHA so if you are considering a FHA loan then you need to find a lender that will cooperate with the FHA.  Your real estate agent should be able to help you to find a FHA preferred lender or you could check the FHA website.  If you fill out a request online the FHA will respond with a list of lenders that you could use.  If you are approved for a FHA loan you can receive lower interest rates and a smaller down payment.  If you don’t have the best credit score and are looking at purchasing a home then you should consider applying for a FHA loan.

FHA Loans – Helping Americans Live The Dream is a post from: Debt Free Journey

If you are considering moving on from your home and purchasing a new home then you might be concerned about the process of selling your existing home to buy your new home.  No-one wants to pay two mortgage repayments at once and most people couldn’t afford to do that so you might be worrying about selling your current home on time so you won’t have two mortgages on the go.  We can’t control the market though and sometimes a house just doesn’t sell as quickly as you would like it to.  This is when a mortgage bridge loan can help you out.

Mortgage bridge loans are a short term loan that is designed to enable you to move into your new home even before your old home has been sold.  A bridge loan can help to pay off the old mortgage and also to put down a deposit on the new home.  By using a bridge loan you don’t have to wait for your old home to be sold before buying your new one.

When you take out a bridge loan you are usually not required to make a payment for the first six months of the loan.  However, if your old home remains unsold at the end of that six month period then you will need to begin making payments.  The payments required then will be interest only payments as you don’t want to be building equity on the old home.  When your old home is sold you can then pay off the bridge loan and get a traditional mortgage to finance your new home.

Bridge loans are very handy for those people who want to move into their new home straight away or are anxious to purchase the home they have found before someone else does, but haven’t been able to sell their existing home as yet.  In some situations a move is necessary to move closer to a new job or to relatives, whatever the reason for the move, a bridge loan can make it much less stressful financially.

There are some disadvantages to bridge loans however that you should be aware of.  Because a bridge loan is short term and is a little more risky than a traditional loan, it will have a higher interest rate and higher fees.  So when you do begin to make repayments you will be making them at a higher rate.

Quite often when using a bridge loan you will have to use the same finance company for both the bridge loan and for your new home mortgage.  The disadvantage of this is that you could find yourself locked in on terms that may not be the best terms when compared to other lenders.  Bridge loans will vary from lender to lender on closing costs, fees, interest rates and terms and some lenders won’t even offer bridge loans.  It is important to understand all aspects of a bridge loan before signing any contracts.

Fill The Gap With A Bridge Loan is a post from: Debt Free Journey

First you have to ask yourself if refinancing is right for you.  Using a home loan refinance online calculator, compare your existing loan, a new loan and your financial situation to determine if and how you may be better off refinancing. It might make sense to have a smaller or larger monthly payment — especially if your income has changed. A smaller monthly payment will increase your available funds, while a larger monthly payment will speed up your mortgage payoff. Either way, refinancing should help in meeting your financial goals.

Next you should look for a rate reduction.  The general rule of thumb is that if your closing expenses can be recovered in 30 months or if the interest rates are 1 percent lower than your current rate, home loan refinance – online or off – makes sense.

You should also look for ways to reduce the term of your loan.  If you are 5 years into a 30 year mortgage and you can get into a 15 year mortgage for about the same monthly payment, you shave 10 years off your loan and save tens of thousands of dollars in interest rates.

By doing a home loan refinance online calculation, you will also be able to determine whether you can switch from an adjustable rate to a fixed rate mortgage.  Another option is to change the terms of your adjustable rate mortgage to make it more attractive.

The final refinancing solution that you want to be looking at is whether you can get money out of your home.  Perhaps you want to send your kids to college, make repairs and upgrades to your home, or just take a dream vacation.  By doing a home loan refinance online calculation, you can see whether these options are viable for you.

It can make a lot of sense to refinance when the interest rates drop — if you are going to be staying in your home for long enough to recoup the closing costs.  Also, if you can increase or decrease the loan term to meet your current financial goals, refinancing can be a good idea.

You will need to provide many of the same documents you supplied for your first closing.  A new credit check, survey, title search and insurance, an appraisal and an inspection are usually required. You may want to check your files for the original documents and begin collecting updated information on these necessary items.  Depending on the mortgage loan you select, there may be charges for loan origination fees and points.

You can pay your closing costs in cash at the time of closing, roll the costs into your new loan amount, or add a premium to your interest rates.

Additionally, you should know that if you pay more points, you can sometimes lower the interest rates.

All of these factors can be calculated when you do a home loan refinance online.

Home Loan Refinance Online Searches Get You The Best Rates is a post from: Debt Free Journey

REO stands for “real estate owned” and it means that it is a property that the bank has foreclosed on.  Generally, you will get a better deal on a REO property than you would if it were available from an initial homeowner.  This is because the lender is not in the business of owning or managing properties.  Therefore, they have an incentive to get the homes off of their books.  Expresspath financing was developed specifically to get homes off Fannie Mae’s books.

Express Path financing uses a low down payment fee (also known as LDPF), which means the mortgage insurance is not built into the rate. Buyers are able to compare rates from other lenders more easily with LDPF. There is a “MIsubstitute”, which is comparable to traditional mortgage insurance that a buyer would pay.

For owner occupied single family homes, 100 percent of the loan can be financed through expresspath.  However, the new homeowner is expected to make a token $500 down payment.  The $500 may be used for closing costs.

A property must be “owner occupied ready” to qualify for express path financing.  That means that no significant repairs must be made in order for the home to be habitable.  The NPDC makes the final determination on whether a home is owner occupied ready.  The NPDC is authorized to make repairs themselves to make a home owner occupied ready.

You will get a low down payment loan with an interest rate between 0 and 3 percent.  Additionally, you can get up to 5 percent back as a seller concession.  Express path financing is available in 15 and 30 year loan periods.

Investors who can put down 10 percent of the loan are eligible for all of the benefits of Express path financing.  Investors may receive appraisal waivers, reduced documentation, and all of the PHH Mortgage Guarantees

Additionally, manufactured homes are eligible for expresspath financing if they are coded correctly.  The maximum loan to value on a manufactured home is 95 percent.  Unlike traditional properties, manufactured homes must be owner occupied to qualify for express path financing.

One of the benefits of express path financing is that the appraisal is done before the home goes to market.  When the buyer goes for financing, approval can be quickly granted based on your own credit and income information and is not dependent on the home’s performance.

Express path financing is a quicker way to get into your new home and you can often get a better rate by using the system.  When you apply, you get a loan decision (not just pre-qualification) in 30 minutes or less.

If you are looking to buy a new home in today’s market, give express path financing a second look.

Express Path Financing A Solution For REO Sales is a post from: Debt Free Journey

Second mortgages are secured loans that do not have first claim to the house.  If you go into foreclosure, the primary mortgage will be paid off from the proceeds of the sale before the second mortgage is.  That is why second mortgage interest rates are higher because there is more risk involved.

Because people with bad credit are at higher risk of defaulting on their home payments and going into foreclosure, bad credit second mortgage solutions are harder to find.  Here are some of the things banks look for.

First, is there any equity in the home?  A bad credit second mortgage ca often be secured when the homeowner owes 80 percent or less than the house is currently valued at.

Second, is there a low debt to income ratio?  The more debt you have, the less chance you have of securing a bad credit second mortgage.

Third, do you have a solid employment history?  If you do, you are more likely to secure a bad credit second mortgage.

Second mortgages can be used for a number of things.  If you do not have the traditional 20 percent down payment, the second can secure the difference.  Seconds are also used as home equity lines of credit to allow the homeowner to renovate the home or just spend the money.

It is also possible to secure a second mortgage above and beyond the value of the home.  Though this was more common when the credit markets were flush, sometimes you can get loans totaling 125 percent of the value of the property.  Lenders usually allow these loans when they perceive that the value of the property will rise in coming years.  This could be because the real estate market is on the upswing or it could be because the new owner is investing in improvements.

You should also know that it is possible to take out third and even fourth mortgages on your home, though these are rare.  The interest rate on each successive loan becomes steeper as the order of payment in case of a foreclosure is reversed.

Prior to its going belly up, Countrywide was the largest source of bad credit second mortgages.  Now that they are no longer in business, it is more difficult to find these loans.  If you need a bad credit second mortgage, you may want to simplify the search by turning to online providers.  In this way you can fill out one form and have several lenders make offers for your loan.  You can compare rates in one easy step.

Bad Credit Second Mortgage Lenders Take A Risk On People With Lower Scores is a post from: Debt Free Journey

Home ownership is part of the American dream.  But, the average cost of a home is six to ten times an average person’s salary depending on what part of the country you live in.  The only chance of owning a home for an ordinary person is to take out a mortgage.  If you have bad credit, it means going to bad credit mortgage lenders.

Many things can happen in people’s lives to put them in a situation where they have bad credit.  It may be the result of overextending yourself.  It may be that you are bad about paying bills.  You may have also had situations outside of your control like a major medical crisis or unexpected layoff.  In any case, bad credit mortgage lenders give you a chance to achieve the American dream of homeownership.

Unfortunately, it is not as simple to get yourself out of a bad credit situation as it was to get into it.  There are some things you can do immediately to improve your credit score, but other options take years of steady payments to improve the bottom line.

One thing you can do immediately is to obtain a free copy of your credit reports.  Then, go through and see if there are any errors.  If errors exist, report them immediately.  The credit bureau has 30 days to confirm the debt.  If they are unable to, then they must remove it from your records.  This can help your credit score tremendously.

When you are thinking about buying a home, make sure you make all your payments on all of your bills on time for at least a year.  This will improve your chances of getting a good rate on a loan.

But, when it comes to actually buying the home, you may find that you have no choice but to go to bad credit mortgage lenders.  This will mean that you have a higher than average rate on your loan and you may also be required to pay extra points.  The lender may also require that you take out insurance to secure the loan.

If you agree to these terms, you have a good chance of improving your credit over the next couple of years.  That is because when you make payments on a home, it improves your credit score.  After 24 months, consider refinancing the home because you should be able to get better rates after you have had the time to rebuild your credit.

Bad credit mortgage lenders offer subprime loans because the risk they take that you won’t pay them back is outweighed by the higher rates and fees you pay.  That’s how bad credit mortgage lenders make their money.

Bad Credit Mortgage Lenders Homes For People With Less Than Perfect Scores is a post from: Debt Free Journey

FHA and VA loans are loans that are backed by the Federal Housing Authority and the Veterans Administration, respectively. These two groups both have the goal of helping more Americans realize the dream of home ownership. They work in cooperation with certain lenders and provide those lenders with mortgage insurance in case you have to default on your loan.  Generally, these types of loans have a lower down payment, may have lower interest rates, and may be easier to qualify for. Also, with FHA and A mortgage loan types, the FHA and VA themselves set a lot of the parameters of the loan, such as how much of a down payment is needed, how much interest can be charged, inspections of the property in question, and so on. That is why not all lenders prefer to deal with FHA or VA mortgage loan types. The lenders have more control with conventional mortgage loan types.

Another major difference in types of mortgages is whether the loan is a fixed-rate or variable-rate loan. A fixed-rate loan has one interest rate that is set and remains unchanged throughout the life of the loan. Some people prefer to have a fixed-rate loan, especially during times of a “buyer’s market” such as we have now. Rates as well as housing prices tend to be lower right now, so it makes sense to get the lower rate and keep it forever, as interest rates are more likely to climb in the future, rather than decrease in the future. Also, knowing how much your payment is going to be helps you budget your finances more easily.

However, it can sometimes be more difficult to qualify for a fixed-rate loan, so some folks go with the adjustable mortgage loan type.  Adjustable mortgages begin with one interest rate, but it is not necessarily going to remain the same throughout the life of the loan. Periodically, the interest rate can be adjusted to suit market conditions. Depending on what is happening in the economy and on what the prime interest rate is, if you have an adjustable mortgage loan type, your interest rate (and payment) can go up or down.

There are also ways of financing that are known as unconventional mortgage loan types. There are a variety of such types of loans, and they are relative newcomers to the home lending industry. You can find interest-only mortgage loans, balloon mortgages, and even reverse mortgage loan types. When you are searching for financing to make your dream a reality, be sure to look into all mortgage loan types to see which is the best fit for you and your family’s circumstances.

Different Mortgage Loan Types Can Make Or Break You is a post from: Debt Free Journey

Mortgage bridge loans are short-term loans that are designed to allow you to get into your new home before it is sold to someone else even if your current home has not sold yet. Bridge loans pay off the mortgage on your current home, and any “leftover” money can be used as a down payment on your new dream house. In this way, it is not necessary to wait for your house to sell in order to get into your new home.

Generally speaking, bridge loans do not require payments for about the first six months. After six months, if your old house is still on the market, you will have to begin making payments; sometimes those payments are interest only, as everyone knows you are not interested in building equity in that house. You are trying to sell it, not use it as a home or an investment!

When your house does sell, the bridge loan is paid off and you take out more traditional financing on the home of your dreams. Bridge loans can be especially useful for folks who really want or have to move even if they are unable to sell their old house. Examples of such times might be to be closer to an ailing relative who needs assistance or moving due to a job transfer. Of course, sometimes, you are just anxious to buy the house you want before someone else gets it first.

Although a bridge loan may be just right for you and your present circumstances, there are some definite disadvantages to mortgage bridge loans, as well. Because they are short-term and a little risky, they tend to come with higher interest rates and fees that are not associated with more traditional mortgage loans.  That means more money out of your pocket. Also, one common stipulation with most bridge loans is that you must use that same lending company to finance your new home, which might lock you into terms that are less favorable than they would be with a different lender.

As with any financial transaction, the actual closing costs, fees, interest rates, and terms for bridge loans can vary greatly from lender to lender; in fact, there are some lenders who do not offer bridge loans at all. If you do find yourself in need of a gap-closer loan so that you can move, it is very important that you fully understand everything before you sign on the bottom line.

Bridge Loans May Be Perfect For You is a post from: Debt Free Journey

Subprime loans are generally required by people who have missed more than two payments in the last 12 months; have a judgment, foreclosure, or eviction against them; declared bankruptcy in the last 5 years; or have a generally defined high risk of default.

Back in the 1930s, the 30 year fixed rate mortgage was introduced as a financial instrument.  Since then, the rate of home ownership has doubled and two-thirds of Americans own their own homes today.  To expand the reality of homeownership to as many people as possible, sub prime or bad credit mortgage loans came into being.

When you take out bad credit mortgage loans, be prepared to pay higher interest rates and fees.  You may also have to take out extra insurance to ensure that the bank gets paid back.  Be prepared for bad credit mortgage loans to be more difficult to get in 2009 than they were before the housing bubble burst.  This is because there is less liquidity in the markets and the capital will flow first to those with better credit.

But that does not mean that bad credit mortgage loans do not exist.  You just have to work a little bit harder to find them.

First off, you should clear up your own credit history to the extent possible.  Get a copy of your credit report and dispute any inaccuracies.  Pay off any bad debt and get the creditor to mark the bill satisfied in full on your credit report.

Then, start shopping for lenders.  You are looking for a bad credit mortgage loans lender who will give you the best loan at the best rate with the fewest fees.

Be prepared to get into a loan for the short term as your chances of refinancing after 24 months are good.  There are two reasons for this.  The first reason is that after 24 months of regular payments, your credit will improve making regular loans more accessible.

But, the other reason is that by 2012, the credit markets are bound to have improved.  You will have built equity in your home so the loan will be a secure investment for the bank.  At that point, you can refinance into a more manageable loan.

Bad credit mortgage loans exist to allow people like you the benefits and security of owning your own home.  These subprime loans are lifesavers for people who want to work their way back into normal credit.  Generally within 2 to 3 years, a responsible borrower will get into a regular loan rather than the bad credit mortgage loans they started with.

Bad Credit Mortgage Loans Making The Dream Of Homeownership Come True is a post from: Debt Free Journey