5 Killer Reasons You Can’t Get A Mortgage (And How To Resolve Them)

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Buying a house, when you have credit problems, can be difficult. If mortgage companies are continually declining your applications, you might be wondering why. It can be tricky when you have no means to buy a new house. If you are unsure why you can’t get a mortgage, read this article. Here are five killer reasons that mortgage companies decline applications. By knowing why you can’t get a mortgage right now, you can work to fix the problem.

  1. You have no credit history

If you have no credit history, mortgage lenders have no way of knowing whether they can trust you. Your credit score shows people whether you are timely and trustworthy when it comes to paying people. If you have no score at all, mortgage lenders have to guess whether you will pay them on time. Why would a mortgage company take a gamble on you when there are hundreds of other candidates out there? They wouldn’t. You need to work hard to build up a credit score. You can do so by putting utility bills in your name and always paying on time.

  1. You are looking at houses out of your range

Sometimes people apply for massive mortgages, when they don’t need to. For example, if you work in the city center, you might be looking at buying a property in the center of town. These properties will be super expensive, though, and so you should be careful. If you can’t get an enormous mortgage to cover a townhouse, maybe you can get a slightly lower mortgage on a property in the suburbs. There are loads of beautiful South Surrey homes for sale. If you live somewhere near the city, but not in the center, you can save yourself loads of money.

  1. You are self-employed

Being self-employed is not a crime, but in the eyes of a mortgage lender it is a serious drawback. When you work for a steady employer, you have proof that your income will remain the same or increase over the next few years. When you work for yourself, you can’t prove that you will always have an income. It doesn’t matter how many clients you have right now; you might struggle to prove that your income is stable. If that is the case, nobody will want to give you a mortgage. You should consider using evidence, such as bank statements and client references.

  1. You have serious debt problems

If you have serious debt issues, you should not get a mortgage. It is as simple as that. You need to focus on your current debt before you decide to take on more loans. Take some time to repay your current debts. Doing so will help you to build a credit score so that it is easier for you to get a mortgage loan later. It is frustrating when you can’t afford to buy a house, but it is for the best. The last thing you want is to have problems with your finances.

  1. You are always late with your payments

If you are currently repaying loans, and your payments are always late, you need to sort that out. Paying people late will ruin your credit history. That means that you will struggle to get another loan from anyone else in the future. When you are repaying loans, you need to make sure that you always make your payments on time. It is best to schedule your payments so that you are sure that you always have money for them. Set up direct debits from your bank to ensure that you always pay lenders on time.

Your How-To Guide on Securing a Mortgage With a Bad Credit Rating

A poor credit rating can see fit to quash your dreams when it comes securing a mortgage. But, you don’t have to live in a negative debt cycle forever. What is more, you can achieve your dreams of becoming a homeowner, if you have a bad credit rating. When it comes to securing a new property, having an exemplarity credit rating is considered a definite thing. But, if you don’t have a good credit rating, you may face some difficulties.

You can, however, secure your dream home, by following the advice in this guide. Yes, it’s that simple.

Think About Your Money

While an adverse credit rating can be something of a stumbling block when you want to mortgage a property, it is just that. A barrier. It’s not the end of the world. Now is the time to assess your money and ensure that you have a sizeable deposit in place to sway the opinion of your bank manager. According to  http://www.smartline.com.au/ you also need to make sure that you need to be earning a decent salary. Without this, you may be refused.

So, assess your finances. Make sure that you are saving in earnest and that you are earning as much as you can. If you have debts, pay these off. You need to make sure that you are paying off debts before you save cash. Saving while you have debts in place is somewhat counterproductive.

Mortgage Eligibility

Now is the time to seek out specialist mortgages for those with an adverse credit history. These are known as subprime mortgages. They can come with higher rates of interest and a longer list of terms and conditions. But, if you are keen to own your first property, this could be a great way of getting your foot on the first rung of the property ladder.  You may need to have a deposit of 30% to secure your home. But, do make sure that you have this in place. It’s a lot of cash, but it’s worth it in the long term.

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Managing Your Credit History

You can, of course, take the proactive step of sorting out your financial problems. Your credit rating doesn’t have to be negative for a long time. You can ensure that you get a copy of your credit report. Make sure that you correct any errors. Take the positive step of paying back loans and debts on time. Now is the time to start putting your money where your mouth is and paying back any debts that you owed. This will iron out any wrinkles within your credit report.

Knowing Your Options

Mortgages don’t come in a one size fits all solution. So, you need to do some thorough desk research before you apply. Setting the right tone on your credit rating is vital. But, it’s not the only way to correct your credit rating. If you are currently saving for a mortgage spend, the next five years saving. This will ensure that adverse credit ratings are removed and that you have a sizeable deposit in the process too.

What You Have To Do To Buy A Property

If you have decided to jump in and get on the property ladder, there will be a lot of expenses to cover. Buying a house is not as simple as popping into a store a walking away with the goods. It is a long process involving lots of people. It will be expensive, and it will be long-winded. Owning your home gives you a great deal of freedom though.

If you have been looking at properties, you might be wondering if you can afford them. Use an online mortgage calculator to see if you might be able to borrow the kind of money you would need to buy the type of properties you have been looking it. Some countries have seen mortgage regulations changes because of the financial crisis. Most people may find it difficult to borrow more than three times their gross annual salary. You will also need to have saved a minimum of 10% of the value of the home.

choosing new home

Thanks to Flickr.com for this image

If you are in a good position, you probably have over 10% of the value of the home tucked away in a savings account. You will have a job that is a full-time salaried position you have held for over a year. You should also show a positive balance and minimal spending on your bank account for the last three months too. It should include you putting away savings equal to the mortgage repayment each month. You should have no credit problems or debt difficulties, and you should be under 45 years old. If all this is true, you are probably a mortgage lender’s dream customer and should be able to borrow the money. Check where you stand with an independent mortgage advisor.

Once you have your mortgage offer in place, make a formal offer on the property you wish to buy. In some countries or states, you may have to pay tax on your purchase, so make sure you have this in cash ready and available. You may need to enlist the help of a lawyer to manage the legal side of the purchase and money transfer. They can also tell you how to do a title search that will confirm who owns the property and details of mortgages or builder’s liens on the land. A survey will confirm the condition of the property and its actual value to satisfy the mortgage lender.

The costs involved in buying a house are numerous. They include the lawyer or solicitor’s fees. There will be a mortgage application or arranger’s fee as well as any broker’s fee. The title or land search and the survey will incur charges you must pay up front. There may also be additional local authority search fees and your land registration fees. When you have completed your sale, you will also need to pay removal costs. Each of these costs will incur a tax. The purchase of the property may also incur a tax like Stamp Duty. Finally, you will need to clear all bills owed from your previous address when you move.

Tenure and Home Loan

When taking a home loan, tenure is an important component. The thumb rule is, the longer the tenure, the greater is the cost of the house. Therefore, when banks calculate the EMIs on the basis of the tenure, they project it as a lesser amount payable in the long run. When a home owner calculates the total amount payable over the years, he/she finds out that the total sum paid is much higher than the actual amount of loan taken.

A person interested in home loans can use housing.com to find their eligibility. The property search portal offers numerous features including a home loan eligibility calculator. This provision allows anyone to find out how much home loan can they obtain on the basis of their earning capacity and the price of the house that they plan to purchase. The best part of taking property loans from housing.com is that one does not have to provide any personal details while trying to assess the home loan eligibility. The process is simple and ensures that the contact details in the applications of interested people are not shared.

 home loan eligibility calculator

Using the home loan eligibility calculator

One can easily understand how tenure affects the home loan by using the housing.com eligibility calculator. When one enters the monetary details, the resultant page shows a down payment amount, along with the EMIs. The tenure is also given on a slider. One can use the mouse to change the tenure by moving the slider horizontally in either side. As one changes the tenure, the difference in the EMIs can be easily seen. As the tenure increases, the EMI decreases.

However this feature does not explain how much actually does a consumer pay in the long run. It is true that one can calculate the total amount by multiplying the EMI with the total tenure. However this calculation does not take into account the inflation and the future value of money. Therefore the final amount seems irrationally high for a home loan.

Tenure and Time Value of Money

Whenever a person takes a home loan for a long tenure, the repayment amount seems to be considerably higher than the total amount borrowed. The reason for this is that the final amount paid is calculated assuming that the value of money decreases with time. Remember how much has the cost of cold drinks increased over the years? It is the same principle governing that cost: inflation. It is true that there are other factors at play also. The supply demand trends too affect the cost of something. However when the banks calculate the EMIs, they assuredly want returns which are more than their investment in the loan seeker. However as the money loses value with time (inflation), banks offer a person taking a home loan a repayment plan which looks more ridiculous the greater the tenure is.

But when one starts calculating the actual value of that money backwards using the basic principles of finance, one would find that the actual amount that one returns to the bank is not as high as it seems. The percentage which is used for calculating the value backwards is a complex percentage which is calculated after assessing the inflation trends over the years, bearing in mind any corrections to ensure that the banks return more money.

In Conclusion

Tenure and home loan undoubtedly are intertwined. But when one assesses the relationship, the plans originating from this relationship seem fair on the banks’ part.

The Ultimate Remortgaging Guide

The decision to remortgage should not be done lightly. On the contrary, this is a massive financial move. You need to decide whether now is the right time. You cannot, and should not, have a flippant attitude to matters of remortgaging. You need to make sure that you are in the best possible financial position to do so. After all, mortgages are an enormous financial responsibility. The decision to remortgage should be done with careful consideration.

Remortgage

Simon Cunningham

Value Your Home

Valuing your home is the first step into the decision to remortgage. You need to be aware of how much the property is worth and whether you are in negative equity. Negative equity is the result of the credit crunch. Many UK homeowners found themselves in the less than enviable position of negative equity. If you are, you will not be able to remortgage. Your home needs to have a certain value before you take a loan out against it. One of the best ways to ensure that your home is fit for remortgaging is by using detailed home reports and experienced surveyors. This is the key to remortgaging success.

Do You Owe More Than £25,000?

If you owe more than £25k on your mortgage, now is certainly not the time to consider remortgaging. Saddling yourself with further debt will only lead to financial implications. The first steps that you should be taking are to pay off your mortgage. Owing an excess of cash can have an adverse effect on your property. So, take the helm of your finances and pay off your mortgage if you owe more than this amount. Paying off your mortgage early is an excellent way to beat interest. What’s more, you will be quid’s in, in the long term

Check Your Credit History

Having a near on immaculate credit history is one of the best ways to ensure that you are in the position to remortgage. If you have faced financial difficulties in the last two years now is not the time to consider remortgaging your property. After all, remortgaging is borrowing against the house. If your mortgage provider does not see you as a viable prospect, they will not loan your further cash. Check your credit score online to ensure that you are a viable candidate.

Is Now the Time to Remortgage?

If you want to save money and avoid moving house, now is the time to remortgage your property. But, you need to be in a viable financial situation in order to do so. Banks will lend money to those who have bad credit. If you are keen on saving money on your property and you are in the economic position to remortgage, now is as good a time as any. Your existing lender will see that you have a better rate. What is more, they may allow you more flexibility on your home. This is an excellent way to see significant savings on your current property and your monthly repayments. You could even reduce the term time and ensure that you are paying less overall. Of course, you don’t have to stick with your current lender. See what other options are available to you.

The Complete Guide To Reverse Mortgages

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Thanks to American Advisers Group for the image.

Most people count down the days until their retirement. It means finally taking some time for yourself after years of hard work. For some it means spending more time with family, traveling or taking up a new hobby. However you spend your retirement, it should be relaxing. You should leave the stress of your old life behind.

However, because of financial uncertainty, that’s not always possible. For those who are economically insecure, retiring can be a daunting prospect. Can you afford the the lifestyle you currently live? How long will your savings last you? How much can you leave behind for the family?

One option to help free up some money in your retirement is a Reverse Mortgage. It’s a loan that is taken out against the equity in your house. Sound confusing? (Loans always are!) Here’s how it works:

Use the equity in your house to borrow money

If you’re over 62 and own your own home, then you’ve probably got a lot of capital tied up in your home. You can’t get to that money without selling your house and freeing up the money. With a Reverse Mortgage, you use that equity in order to borrow money.

You can choose whether to take the full lump sum or take it as a monthly payment. Still with me? Now to answer some common questions on reverse mortgages.

How is it payed back?

The loan isn’t paid back until you stop living in that house. Once you sell the house, the money will be freed up and the loan can be repaid.

Okay, so what’s the benefit?

Well, it’s a popular choice when considering a retirement plan, because the house is likely to be the last you live in. You can therefore borrow against the equity because it won’t be repaid until you leave. It’s likely that you’ll remain in that house until you move to care housing or sadly pass away. In both instances, your house would be sold and you won’t be reliant on the money from the sale. A portion of the sale will go to paying back the loan.

The loan is also tax free and federally insured so it offers an element of security. You are also only required to pay back the value of the property. This means that if interest rates sky-rocket, you won’t end up paying more in loan repayments that the actual cost of your house.

And the downsides?

Well, once you take the loan, you can’t leave the house. If you decide to move on, you must pay back the loan in its entirety. You’ll then be left with a hole in your equity and will end up downsizing.

Interest rates can be higher than your average mortgage and there are some high up-front costs.

As with any loan, Reverse Mortgages are complex and you must be sure to understand the full details of what you are signing. You need to fully understand the limitations. And when you’re calculating your retirement budget, be sure to factor in the interest rates. But, if you’ve done your homework, it could be a great way to unlock equity and make the most of your retirement.

How To Get A Mortgage When You Have Bad Credit History

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Buying a home is a huge step for anyone. If you have bad credit history, though, then the step is going to be a little tricky. Mortgage companies use your credit history to decide whether you are a reputable candidate. If you have severe credit problems then, the company may be wary about giving you a mortgage. The company won’t feel confident that you will make all you repayments on time. That means that some companies will reject you on the basis of your credit history. It won’t matter that you have a deposit for your home ready or that you have a great, stable income. Many companies discriminate against people with poor credit history and won’t even consider you. Don’t panic, not every company is the same and there are a few things you can do to improve your situation. To do so, you’re going to have to be ready to take control of your financial situation. Here is how you can get a reasonable mortgage, despite your poor credit score.

What Mortgages Can I Get?

Just because some companies will reject your application from the offset, that doesn’t mean that you need to give up. Some of the best mortgage companies will accept people will poor credit history, you just need to know where to go to find them. Look for companies who offer adjustable rate mortgages, as they are likely to accept low credit scores on a sliding basis. Often you may have to give a larger deposit when you have a poor credit score, and so you should take this fact into account when buying a home. You might need to find up to 15-20% of your total property cost so that the mortgage company will accept you. That might sound unfair, but once you have found the deposit, you will be eligible to the same rights as everybody else.

How Can I Improve My Credit History?

When a mortgage company does a background check on your credit history, they will find out about all your credit, good and bad. If you are planning to buy a home in a matter of years then you can begin to build-up a healthier credit history. An easy way to begin building your credit history is to use a credit card. You should pay for big purchases, such as vacations and shopping, on your card. You should aim to pay-off your credit card on a month by month basis. Doing so will build-up your credit score and make it easier for you to get a mortgage.

Take A Look At Your Credit Files

There are different companies that calculate your credit scores. You can access your credit scores at any time, and so it is worthwhile taking a look at the state of your scores. You might find that one of the companies gives you a better score than the others. If that is the case, you can apply for a loan using that particular company. The mortgage company will see your best-possible credit score. That means that you will have a better chance of getting a reasonable mortgage.

Don’t Look At Your History Too Often

Each time that you look at your credit history online or through a provider you make your credit score worse. If you keep checking your score, you could end up with even worse credit history than you had at the start. Of course, you need to know your credit situation, but you mustn’t keep checking it. If you check your credit score more than once a month, you could find yourself blacklisted by credit companies. That will make it impossible for your to get a mortgage. Check your score on rare occasions.

Australian Homes: You Get What You Pay For

Australian Homes
Australian Homes

So what’s in a price and is there any value to buying a home below market value? As far as semantics go it is actually not possible to purchase a home below market value because, strictly speaking, the value is determined by the price you pay.

If you’ve heard someone say they bought below market value and have wondered whether it’s a good idea, you’ll probably find the person managed to buy a property at a price lower than others in the area. They could also mean they were able to get it for a price lower than what would have been available on the market six months to a year ago.

Buying “cheap” is not always better. If the area is priced high and you manage to secure a home for $50,000 less there is going to be a reason for it.

One of the reasons could be that the values of house in the area are dropping, or starting to drop. It also helps to know that in properties where most of the land is occupied by house, you develop what is known as a low land to asset ratio, which is another reason you might be able to buy under market value.

What you should remember is that home values drop faster than land value. Where your attention should be focused is on learning about the different areas and what constitutes a good buy in each locale.

Of course price is always going to be one of your biggest drivers when choosing a property, but alarm bells should ring if something seems too good to be true. Here are some practical tips to help you navigate yourself in a sea of prices and values.

1. Consider the Quality of the Property

Parts of the country, like the major cities, that have decent infrastructure and amenities generally have fewer vacant properties because of the strong demand from tenants, residents and investors. You can expect properties in these areas to be priced higher, so if a house has all the bells and whistles but is being sold for a very low price there’s going to be a catch. If you want to live in a prime area you can expect to pay a premium price. The price has got to be commensurate with the quality of the property and if it’s too far under, find out why.

2. Know Your Market

Do some area research and find out what the market related prices for other properties area. Compare land of the same size, the number of bedrooms and the finishes. Compare home loans to see which arrangement will work best for your financial situation and what terms you want to take it over. There are a number of highly competitive offers available and it’s also easier than ever to make a switch online.

With house prices inching up slightly over time, the sooner you can secure a mortgage, the more the value you can get on the market. The three months to April saw house prices increase by 1.7% while statistics for the last 12 months saw a 3.3% improvement in prices. House prices increased by the biggest margin in Perth, with a 3.2% increase, then Melbourne with 3.1% and Canberra with 2.5%.

Sydney topped the list with a median price of $672,760 per property, followed by Perth at $595,609, Melbourne at $539,078, Brisbane with $437,435 and Adelaide with $432,951. The national median house price is $554 410. Unit prices saw a more modest increase of 1.1% with the median price of a unit sitting at $421,354.

Australian Homes: You Get What You Pay For

Understanding the Basics About Liens

Basics About Liens
Basics About Liens

Liens are legal claims or hold on a property whether real or personal which will serve as a collateral against the money or services owed by a person to another entity. They usually exist on loans against the title of a vehicle, second mortgages and when a certain amount is loaned against a property owned by the borrower. If you want to ensure that you can take your money back from someone who owes you unpaid construction services, file a lien on property so that he will have less chances of putting it on sale or transferring the name of the title until the entire debt has been paid.

Understanding the basic ins and outs of a lien will provide a debtor with awareness on how to handle the situation in case a person he owed money or services will use legal means in placing a lien in the property.

The Basic Options

There are certain cases that the lender can forcefully put the property on sale to collect the amount of money owed from the borrower especially when the loan remains unpaid for many years. The borrower can also decide to sell his property if he thinks he do not have other options of paying the money owed. The lien holder on the other hand can ensure that the payments will be received before the title is cleared and transferred to the buyer’s name. There are also cases when the lien holder is allowed to take possession of a borrower’s property but he is not permitted to sell it.

How To Place and Remove Liens

In some cases a lien maybe agreed by both parties but most of the time lenders take the legal option. In order to make a lien acceptable and legal the person owed services or money must go to the appropriate government agency and pay the corresponding processing fee. The lender can also consider online options where they may be able to find companies that can help the processing quicker and more convenient. A borrower who wanted to remove the lien on his property must satisfy the lender by paying the original amount owed, repaying the fee made by lender upon filing the lien and the additional charges to completely remove lien from the property.

Most Common Type of Lien

There may be different types of loans but a mechanic’s lien which is sometimes referred to as construction liens are the most common. This lien is filed if the property owner who required the services of the lender failed to pay for the labor and materials used for the improvement of his property. These services may include landscaping, renovation, maintenance, repair and construction.

Other types of liens like maritime liens are for boats and other kinds of vessels, agriculture liens for farming equipment and tax liens which are imposed by the government because taxes were not paid are also available. Liens can be also filed by the landlord against a person who fails to pay rents while healthcare providers, hospitals and insurers can impose liens to collect unpaid services.

Those who want to purchase a real estate must ensure that the property does not hold a lien that might prevent them from securing a title of ownership. A mechanic lien can be the only option to take your money for the unpaid services you rendered to your client. To ensure that the process is done appropriately you can ask advice from professionals and check out for online sites that offer legal processing of liens. You may consult and inform them about your situation so that they can guide you all the way to the completion of the lien processing.

Author bio:

Melissa is a real estate expert. Her write-ups have been helping people who wish to file a lien on property. She also writes about helpful information in terms of property ownership.

Understanding the Basics About Liens

A First Time Buyers Guide to Mortgages

First Time Buyer
First Time Buyer

Purchasing a mortgage, is never easy as there are different types and it can often be a complicated process and become a daunting task for many. We’ve come up with a guide to help first time buyer’s mortgage their homes.

Fixed or variable

When deciding on a mortgage, you’re essentially left with a decision between a fixed or variable rate.

There are two forms of variable rates, tracker mortgages and standard variable rates. Tracker mortgages follow the interest rates set by the Bank of England in which they will mirror, and either rise or fall.  Standard variable rates, are set by the lenders, every lender is different.

With fixed mortgages your interest and payments are all set for a specific period of time, which will not alter. The choice between them both is as simple as: do you opt for a solid budget mortgage (fixed rate) or do you go with a variable rate, and find a good deal that could initially be cheaper until interest rates flutter.

The Process

Before considering a mortgage, you need to get your money in order and then obtain a credit check of your own. The better your credit rating the more options available to you.

Once you’re certain a mortgage is right for you, you need to find a broker, its best to go with someone who has been recommended. You can speak to them face to face or on the phone. You then have some upfront costs, which depend on the type of mortgage, including booking fee, deposit and solicitor’s fee.

A credit check will be made and you’ll usually need to supply your lender with your driving license, passport, 3 year address and work history, 3 of your latest payslips and your latest p60. You’ll also need 3 bank statements, details of any outstanding loans or credit and any necessary details of any credit problems you have had in the past 6 years.

It usually takes around 2-4 weeks to obtain a mortgage as long as you have followed the correct steps. When applying you receive two documents one with the key facts about the mortgage services and another including key facts about your mortgage. It’s essential you read through both as a mortgage is one of the biggest financial commitments you can make.

 

A First Time Buyers Guide to Mortgages