Colorado | Home Loan | Mortgage | Refinance

Archive for June, 2010

Most people think that if you have a bankruptcy listing on your credit report, you have zero chance of ever getting a mortgage again. Even four or five years ago this might have been true, but these days it’s definitely possible to get a mortgage, even if you have a bankruptcy in your past. Bankruptcy definitely doesn’t help your credit rating at all, but if you explore your options fully, you’ll see that it’s still possible to obtain a mortgage. So what do you need to do?

Steps One: Repairing your Credit

To prepare your finances for obtaining a mortgage after you’ve been bankrupt, it’s true that you might have to work a little harder than someone with a credit rating that’s more acceptable to lenders. But it can be done! Use the following steps as a guide for preparation.

1. Make a list of your family’s monthly income — be realistic, and include only the income that is 100% reliable, that you know you can count on every month. If you have any other sources of income that aren’t 100% guaranteed, add those to a separate list (this ensures that the “sometimes” income won’t put a strain on your budget).

2. Make another list of your family’s monthly expenses. If you’re not sure what your expenses are, keep all your receipts for a month to give you an exact picture of where you’re money is going. Saving receipts is the best way of getting a clear idea of where the money goes — small purchases add up over the course of a month.

3. Make a budget that you know you and your family can stick to. Make sure all the bills are paid before allotting money for entertainment and other luxuries.

4. Pay all bills on time, and make sure that your loans and credit card debt are listed with credit card bureaus. This will make sure your creditors have proof you’re working to pay debts on time and are serious about repairing your credit. Showing your creditors that you can live within your means is one of the most important steps to getting a mortgage after bankruptcy.

By law, you can apply for a mortgage as little as a single day after your bankruptcy is discharged. However, it’s not necessarily a good idea to do so. It’s important to make sure your credit score is as high as possible, so that you can obtain a mortgage with an affordable interest rate. If you’re approved for a mortgage you can’t afford, those high interest rates will only send your finances reeling again. And if you apply for a mortgage and aren’t approved, the rejection can hurt your credit score all over again.

To give you every chance of repairing your credit and improving your chance of mortgage approval, it’s a good idea to wait at least a year after bankruptcy discharge before applying for a mortgage (and note that some lenders may require you to wait even longer — maybe two or three years).

During this time, it’s important to do everything you can to repair your credit rating. Don’t forget to apply for copies of your credit report and check for errors or obsolete information that might have lowered your rating unfairly.

Finally, note that other factors improve your chances of obtaining a mortgage after bankruptcy. These include your employment history, current income, the size of your down payment, and the loan-to-value ratio of the home you plan to buy.

Step Two: Getting the Mortgage

Preparing to apply for a mortgage is actually more important than applying for the loan. Preparation is what enables you to obtain the mortgage, and if you’ve done enough preparation, you should find a mortgage is obtainable.

Once you’re at the point where you’ve repaired your credit enough that mortgage approval is a possibility, it’s time to start applying for a mortgage. The important thing to understand at this point is that even though you’ve been working hard on your credit score, and proving to your creditors that you can pay your debts, you may still have trouble getting a mortgage from some lenders.

One point to consider, when you apply for a mortgage after bankruptcy, is working with a mortgage broker. You may not have thought about this, but it can be very useful to work with a broker, because they have access to many different lenders, and dozens of mortgage packagers. This puts you in a much better position to find a mortgage with an affordable interest rate. Try hunting for a broker who has experience in working with people who have undergone bankruptcy — with an experienced broker working for you, getting a mortgage will be much easier.

Rachel Jackson is a freelance writer who writes about topics and pertaining to the mortgage industry such as refinancing home mortgage.

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Summary: Credit scores and reports became accessible for a reason. It is to give you the option to habitually check your report.

Credit scores and reports became accessible for a reason. It is to give consumers the option to habitually check their reports. So not checking your credit reports from time to time is like building a house without windows; you’ll never know what’s going on outside.

A couple of credit misfortune occurred in the past all due to non conformity of the FCRA Act of 2003. One incident reported of an identity theft which used the victim’s personal data as means of procuring a loan involving a hefty sum of $50,000. However because the victim never bothered to inquire about the credit account, the theft was never exposed until it was too late to trace.

It is recommended that checking the credit report once a year should be made. In fact, the new FCRA Act of 2003 decreed that all credit bureaus will be required to give out one free credit report per year. It is to combat the rising threat of identity theft that operated within credit circles that became rampant when personal and private data became very readily accessible to hackers and scammers over the internet.

Though the decree states that once per year should be done for checking credit scores, it is more beneficial it have it check every now and then, especially for credit holders who hold several active accounts. The only problem is free credit scores are available once. The next credit report charges around $9 and another $13 for the credit score which should be included since credit reports have considerable codes that needs deciphering.

There are ways to get unlimited credit scores though if paying for a $22 credit score is too draining. Some ways to get unlimited credit scores are through exceptions:

* Persons on welfare are generally allowed unlimited credit scores and reports. So do individuals seeking for work though usually there should be a letter accompanying such request. Because people on welfare are generally the elderly or disabled, if not able individuals that need government support while still seeking for a job, credit bureaus always release credit reports free of charge for these individuals.
* Victim of fraud can also have a one-time free credit report. Unlimited credit scores may not be awarded
* Always credit bureaus award credit scores to those who have legitimate reasons. Usual methods are through writing. This is not unlimited credit scores access however.

A number of lenders and dealers also do unlimited credit scores checks in order to gauge a customer’s capacity to pay. It is advisable not to readily give your account details though if you’re not sure of buying from them, since a couple of checks made on your credit report can have a negative impact on a credit score.

NEW YORK — Mortgage applications volume dropped off by 5.9 percent last week even as mortgage rates decreased, a sign the housing market is struggling with government incentives, according to a report Wednesday from …
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One can avail of low rate auto loans. You just need to be resourceful and ready before applying for an auto loan and you might just be able to avail of low rate auto loans. Even if you are given a higher auto loan rate, there are still ways to lower it down. Basically, the thing that spells the difference between a high or low rate auto loans is the credit record or score. A good credit score is an invaluable tool to access favorable interest rates. In order to ensure that you will have low rate auto loans you need to have good credit standing. If you have good credit history, you will gain the trust of lenders. This in turn will translate into low rate auto loans on your part. Bad credits are given high interest auto loans in order to offset the possible risks the lender will incur in loaning money. Those with good credit standing could expect low rate auto loans of between 2% to 15%. You can do something to increase your credit rating. You should pay off any current debts, make monthly payments for debts you cannot fully pay off or putting money into your savings account. Your savings deposit will help improve your credit score since this serves as your pool of funds in cases of emergency. Once your credit score improves, you will be granted low rate auto loans.

Another way to have low rate auto loans is to pay a larger down payment. The more cash you pay for down payment, the lesser is your interest rate. This is one way of getting low rate auto loans. If you borrow a lesser amount, it necessarily follows that you will enjoy low interest loans too. Aside from that you will also enjoy a shorter term for your low rate auto loans. Short term debts usually have lesser interest rates. But you can also opt for a longer term, where you will pay lesser monthly payment but at a higher interest.

Another way to acquire low rate auto loans is refinancing. For those people who have availed of auto loans, refinancing is a great way to lower their interest rate further. Even if you think you already have the best and lowest interest rate, it wouldn’t hurt to check out what refinancing can offer you. You might still be able to lower it further. Refinancing companies will shoulder the remaining balance of your debt. In turn, you make monthly payments to the refinancing company. But the interest rate refinancing companies charged is always lower than your previous lender. You could make more savings through refinancing and avail of low rate auto loans.