Tag Archives: payment
First Home Buyer Needs Self Education
Any first home buyer is at a great disadvantage seeking a mortgage if time is not taken to understand all the necessary aspects toward obtaining a loan successfully. To find the most favourable deal possible, it is important for a first home buyer to do a good deal of investigation and research that will provide them with the necessary knowledge to make an informed decision. Although a first home buyer can call upon the experience and knowledge a professional broker provides, it is still dependent upon the consumer to do some self educating as well.
Preparation in Advance Securing a mortgage for a first home buyer starts many years before actually needing to buy a home. A first home buyer has to be as attractive a prospect as possible to make sure that this very important loan is approved. In order to be as attractive to lenders as possible, a first home buyer must establish and maintain a positive credit rating in the mid 700s, or higher, to even be considered by a mortgage lender. Establishing rotating credit accounts such as credit card, petrol and retail store accounts and paying these on time will help to establish credit worthiness. Living a product life as an ideal credit consumer will prepare a first home buyer for mortgage approval when the time arrives to buy a home.
Down Payment Always Needed Unless you have financed, sold and financed a home more than once, expect to be required to make a down payment anywhere from 10 to 20 percent of the total home purchase. While preparing for that time to come, conducting positive personal finance management will provide a first home buyer with the necessary history mortgage lenders seek.
Deciding What Can Be Affordable Mortgage lending decisi0ons for first home buyers take into consideration examination of all personal finances to determine the amount of monthly repayments a consumer can afford. A good rule of thumb is a monthly mortgage repayment, insurance and taxes should not be more than what a first home buyer experiences paying rent. Since other monthly expenses such as utility, food, transportation and other living expenses may not change drastically, assuming a mortgage repayment should be possible if it does not exceed a current rent payment.
Seek Pre-Approval All first home buyers should seek mortgage pre-approval prior to searching for a house. This allows a consumer the opportunity to start a process toward home purchase by allowing the lender to examine personal credit worthiness establishing a pre-approved purchase amount. Let the amount the lending institution is willing to “risk” on a first home buyer direct the house search. If that number is not sufficient, certain actions such as coming up with an additional down payment may be necessary to qualify for a larger amount.
Motivation for Action Any first home buyer that has a pre-approval from a lending institution can engage the services of a real estate professional who has a firm understanding off the financial limits that will direct what properties are show, Buying a house is an important step so spending time looking at properties that a first home buyer cannot afford is wasteful.
Although many first home buyers are looking for that “dream” home, choice may be limited in reference to size, type and place for that very first real estate purchase.
Auto Loans – Bad Credit Is Not A Problem
Bad credit is a very prevalent problem, but that does not mean that people with bad credit do not get auto loans. Many lenders out there cater to people with bad credit. Yes, bad credit can mean that you would have to do extensive homework while looking for that loan for your car. It might also mean that you will have to pay higher interest rates on the loan as compared to interest rates offered to people with good credit.
Do not let bad credit stop you from getting that car that you want and need. However, you do need to be careful with your loan. This is because a single missed payment on the loan can further ruin your credit. Moreover, if you are working on building your credit back, you definitely do not want to miss a payment.
Secured Loans
Now let us talk about different types of auto loans available to people with bad credit scores. Almost every dealer and lender would provide secured bad credit car loans to their customers. As the name suggests, the customer has to provide collateral to get this type of car loan. The car itself can be used as a security. The lender would already know the value of the car, so deciding the amount that can be offered would not be a problem. However, as a borrower, you must take care that you do not miss a single payment. Missing a payment would mean loosing your car.
Unsecured Loans
You also have the option of going for unsecured bad credit auto loans. Again as the name suggest, the borrower is not required to offer collateral for unsecured car loans. To get unsecured loan for your car, you need to provide documents that would prove your financial credibility. Your bank statement and income proof would work. Identity proof and documents relating to your financial status are some other documents that the lender would like to see before he/she processes your application.
Avoiding The Middle Man
People with bad credit can also get auto loans from banks and other financial institutions. The dealer acts as the middle person in the auto loan process. By skipping the dealer and going directly to the bank, you can get a loan for your car at much lower rates. You would obviously need to convince the bank that despite your bad credit scores, you are in condition to repay the whole loan. Again, the bank will be looking at your financial status to determine whether you qualify for the loan or not. In addition, if you do qualify for the loan, the bank will determine for how much.
People with bad credit do need to spend some time looking at the various loan options available to them. You must not take any decision in haste. Carefully compare various loan offers. Furthermore, bad credit does not mean that there is no room for bargaining when it comes to auto loans. However, you can only bargain if you know how to shop for car loans and know what you are looking for.