How Mortgage Loans Are Affected by Credit

How Credit Impacts Home Mortgage  Loans 

When applying for a mortgage  loan , one wants to make sure that you have the best possible credit score. Your credit has a great impact on your  loan . Your credit profile will affect the home  loan  interest rate, your ability to qualify for the mortgage  loan , and the type of home  loan  program you can apply for.

Since your credit plays an important role in the home mortgage  loan  process, it is important to understand the relationship between credit and the home  loan  qualification process. It is also important to know what you can do in order to have the best possible credit profile and score before applying for a mortgage  loan .

Bankruptcy and Foreclosures

Bankruptcy and foreclosures are two major negative items on a credit report that can greatly impact the  loan  decision. On bankruptcy, depending on whether it is Chapter 7 or 13 bankruptcy, one might have to wait 2-4 years before the mortgage will be approved. FHA home  loans  allow a homebuyer to qualify with a bankruptcy if the bankruptcy has been discharged for at least two years. Clients with a bankruptcy on their credit report must also reestablished their credit with positive trade lines (new accounts) and have no new negative credit reporting to the bureaus since the bankruptcy was filed.

Foreclosures have a major impact on the ability to qualify for the mortgage as many home mortgage  loan  programs require a client to wait 3-5 years from the foreclosure date before the  loan  can be approved. Short sales, depending on how they are reported to the credit bureaus, can be treated like a foreclosure when a mortgage company is making a mortgage decision.

Judgments and Liens

If a person has a judgment or lien on the credit report, most mortgage companies and  loan  programs will require that the lien or judgment be paid and released before the  loan  will be approved. Tax liens must be paid!

Credit Score

The credit score is the number the lenders will use in order to determine the ability to qualify for a home  loan . It is crucial to have the highest possible credit score when applying for a mortgage. If you have a low credit score, you might not qualify for the mortgage or you might have a higher interest rate. FHA home  loans  require at least a 580 credit score, but many companies will not approve a FHA  loan  unless the homebuyer has a 620 credit score. Conventional home  loans  require a 620 score, but if your down payment is less than 20%, then you will need at least a 680 score to qualify for the home  loan .

What affects Credit Score and How You Can Raise Your Score

Obviously, paying all credit debts on time has a great impact on the credit score. So if you missed a payment, then only time (usually 6-18 months) will need to pass in order for your score to rise back to the original score before the late occurred. Missing a mortgage payment when trying to refinance or purchase a new home has a huge impact on the ability to get approved. Many home mortgage  loan  programs will not approve a  loan  if a mortgage payment has been missed in the last 12 months. Late payments on credit cards will decrease your score as well.

Credit Card balances also have a crucial impact on your score. Maxed out credit cards will decrease your score. It is a good idea to keep credit card balances around 10% of the credit card limit. This means that if you have a $3000 credit card limit, then you do not want to keep more that a $300 balance on the credit card. Paying down your revolving debt or consolidating your revolving debt into an installment  loan  will help increase your score. Installment  loans  are  loans  with terms that once the term is completed, the debt is paid off. You also cannot add new debt on an installment  loan . On a revolving debt, you can payoff and add debt.

Once the Mortgage is Approved

Once you are approved for a home mortgage  loan , it is important to know that you should not add any new debts during the home  loan  process! Adding new debts while still in the  loan  process could affect your ability to close your home  loan . So it is best to wait until the home  loan  has closed and funded before adding any new debt to your credit profile.

Property Loans – For Greater Flexibility And Freedom

Each one of us needs money at one or the other time in our life. You may wish to buy a new home. One can fulfill his or her personal desires by withdrawing money from the savings account. But, do you think it is right to withdraw the savings when an efficient alternative is available that is taking a  loan  from the  loan  market. You can use the savings in future when some emergency occur. Now, the question arise that which  loan  to choose from the infinite number of  loans  existing in the market. If you own a property or want to buy one, Property  loan  will be the perfect option for you.

Property  loans  are secured against a property. Property put as collateral can be a residential or a commercial property. The  loan  providers grant more flexibility to the borrower and freedom to use the money as they wish. A borrower can use a property  loan  to buy a new car or to pay for much needed home improvements.

Property  loans  offer borrowers the opportunity to enjoy the benefit of flexible repayment option, low interest rate and a longer repayment term. Property  loans  are available with the term facility of up to 10 years. The rate of interest on a property  loan  is low as it is a secured  loan .It accounts for a low monthly installment which is much cheaper than the personal  loans .

Commercial property is the property which is used for business purposes. It is commonly known as business property such as office buildings, stores which are intended to operate with a profit. This  loan  is similar to secured business  loans .

Property  loans  are generally allowed against a residential property. When a borrower puts his home as collateral against the  loan , the property  loans  take the form of a mortgage. A property  loan  secured against a home is specifically designed to facilitate the UK residents to provide financial support to them so that they can purchase a home. This type of property  loan  is popularly known as residential property  loan .

The amount you can borrow with a property  loan  depends on the equity in your property. Equity is defined as the difference between the market value of the property and the claims held against it.

There is one drawback of a property  loan . It involves the risk of repossession for a borrower. The lender will repossess the property kept against the  loan  if the borrower defaults on the monthly installments or the  loan  amount.

A bad credit rating cannot stop you from borrowing a property  loan . You just need to put your property as collateral to borrow money from the  loan  market. So people who have faced county court judgments or bankruptcy can also apply for this  loan .

There are number of lenders who provide property  loan . With the technology growing day by day, entry of the online lenders has widened the growth scope of the finance market. Banks and financial institutions are now identified as traditional lenders. Online lenders give the convenience of applying for an online  loan  and try to keep you away from all the hassles. You can apply for an online property  loan  from your home or office’s computer which is equipped with internet.

A borrower can browse various property  loans  providing websites. The process of applying for a  loan  is simple. One just needs to fill up a small application form online with some personal information such as your name,  loan  amount, the purpose for which you are borrowing and your contact number. This information will help a lender to find the  loan  that suits your needs to the best.

But don’t leave everything on the lenders. Just a little effort on your side can help you find a property  loan  at cheaper rates which will help you save good some of money which you can be used for any personal purpose. Most of the online lenders offer  loan  quote. It is available for free or for nominal charges. Collect  loan  quotes from the various property  loan  lenders, compare them and search for the  loan  option that matches best to your financial status.

Savings can work as a significant source of finance but keep them to meet future contingencies. A desire to own a well furnished home can be easily met with a property  loan . Pay low monthly payments on the  loan  and enjoy the interest on your savings in the bank with a property  loan .

Advantages of Military Auto Loans

Lots of people who have served or are currently providing services in the U.S. Military might not know about military auto  loans  concept that are specifically tailored to meet their needs, with low interest rates and better pay back options applied. These types of  loans  are provided only to those who are actively serving in the military. This  loan  is also provided to those who bad credit scores. The repayment of the  loans  is also extremely simple and easy. They make sure that the military people make the most out of this amazing opportunity. But, your duration of service in the military does make difference in getting an auto  loan .

The repayment of the  loans  is also very favorable too all as these are military auto financing. Being a military person if you need a car, no matter with a good or bad credit chances are more for military personnel, all you have to visit website and fill up easy credit application form to get pre-approved by providing some basic identity proof to get approved for military car  loans . Be careful when dealing with any website out there that claim to be offer lowest rates regardless credit history. There are many genuine websites where you can get auto financing for military members even with bad credit rating. Getting reviews and user saying can help lots in making the right decision.

Military auto  loans  option has major beneficial over any traditional auto  loans  including low interest rates applied. Most of the financial lenders are happy to provide auto  loans  for military personnel because they are likely to have stable income and more steadiness in their jobs as compared to people with unsecured jobs.

Online Approval:

The process for credit application are very simple, all you have to visit online and provide you complete details; like your military proofs like income, residential address and region where you are placed. You will be asked to provide your contact details. You are advised to provide your cell phone number and email address. You can never default on a Military car  loan  but if you do chances are your car will end up being repossessed and you might regret your behavior. Due to this your credit might suffer and your credit from bad will go under to real worst.

Everything is done online and in a very easy and instantaneously. There are many websites that provide military auto financing. All you have to do is research and look for the best deal for you. There are many websites that provide the best auto financing deals online. All you have to do is apply online after providing them your contact address, email, phone and email address. There are military auto  loans  called as veteran auto  loans . Veteran auto  loan  are only for veterans. You will have to show proof of everything that have, esp. your active military work. Keep in mind that these  loans  may be easy to get but the financiers do check your credit will be pulled and analyzed before providing you the final report. Let us hope this article helps you in the future.

Car Title Loans: How to Avoid a Repossession

As with any other collateralized  loans , car title  loans  pose the risk of repossession. This is because the vehicle is used to secure the  loan . If the  loan  is not repaid, the vehicle becomes subject to repossession.

Oh well, time to throw your hands in the air and forget about borrowing, right? Not so fast. Those who wish to take out car title  loans  can take steps to avoid a repossession. This way, they can still borrow money without losing their means of transportation.

Let’s take a closer look at the risk of repossession and how you can avoid it when taking out a car title  loan .

Risk of Repossession

First, let’s consider the risk of repossession in the car title  loan  industry. Do a lot of people end up losing their vehicles?

Most people do not go through a repossession when taking out a car title  loan . Studies show that vehicles are repossessed 4 to 8 percent of the time. This means that over 90 percent of car title  loans  are issued without the vehicle being repossessed.

Also, many people neglect to consider that car title  loans  are less risky than other collateralized  loans  – such as home equity  loans  – in some ways. Just think about it: would you rather risk your vehicle or your home?

How to Avoid a Repossession

Having to look over your shoulder for a repo man isn’t a desirable situation. So, you may wish to take steps to avoid this relatively minor risk. These include the following:

Work With a Trustworthy Lender

Research a few lenders on the Internet. Check them out with the Better Business Bureau at and through your own searches. By doing so, you’ll help ensure that you’re dealing with a company who’d rather give you a reasonable car title  loan  than repossess your vehicle.

Take Out Only What You Need

Just because you qualify for $10,000 doesn’t mean that you should take it all. For example, if you need money to pay for a $4,000 medical bill, take out $4,000 – just enough to pay the bill.

Pay Installments on Time

Be sure to make your payments on time. Doing so will keep your interest payments down and the lender will have no reason to repossess your vehicle.

Try to Pay Ahead of Schedule

It is necessary to pay your  loan  installments on time. However, if you are in the position to do so, begin paying ahead of schedule. This will help you pay it off faster and, once it’s paid off, there will be no chance of a repossession.

You may wish to confirm that this is OK to do with your lender.

Renew Your  Loan 

Life happens. If something comes up and you cannot make your monthly payments on schedule, consider renewing your  loan . You’ll have to pay extra interest, so this should only be considered if you have an unexpected problem making payments. In other words, don’t take out a car title  loan  knowing that you can only afford it if you renew it.

The Bottom Line

Taking out a car title  loan  is a personal financial decision. The risk of repossession is relatively low and can be avoided with a few simple measures. All debt involves some risk, but savvy consumers can make the best of it.