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

savings-mortgage

Flickr Image

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.

WoodleyWonderWorks

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.

Are You Struggling to Repay Your Loan?

In the current economic climate money is tight, inflation has hit us again, and it is becoming more difficult to make ends meet. If you have experienced any money problems over the past few years, then it is likely that you have taken out a loan of some kind.

Loans can be a great resource for the public as they can help bail us out of financial problems. They can also help to put food on the table and deal with those pesky bills.

But it is important to remember that loans mean repayments. You might be finding it is tougher than you thought to make those repayments. This is particularly true of payday loans and short term loans. They tend to have a large percentage rate and often leave you out of pocket and having to pay back much more than you borrowed in the first place.

If you have debt problems it can adversely affect your credit score, making it harder to get a mortgage, buy a car or take out insurance

savemoney

Luckily there are a few options open to you if you need help to repay your loan:

Contact Your Lender

Never ignore the fact that you can’t pay back your loan. In fact, this is the worst thing you can do and will often leave you worse off than you were before.

Contact your lender as many of them have repayment plans in place to help people who are struggling with money. In fact, many of them may be able to suspend the debt for an agreed period, as well as informing you of free and impartial advice services.

Individual Voluntary Arrangement (IVA)

An IVA arrangement is perhaps not the ideal option, and you should only consider it as a last resort to avoid bankruptcy.

The arrangement is a personal contractual agreement between you and your creditors, which is a flexible as you need it to be. Your level of capital or income, sometimes both, will often dictate the arrangement.

One of the main issues of an IVA is the length – it can often last several years.

Contact a Debt Resolution Company

Contacting a debt resolution company is another option open to you. Their job is to help and guide you through your debt problems, so you emerge debt free.

At a basic level, they will do everything they can to help you get out of debt.

Most debt resolution companies will deploy an attorney to mediate matters between you and the lenders. They will be responsible for negotiating with them on your behalf and helping get your debts under control.

Don’t ‘Roll Over’

Most loan companies will offer you the option to ‘roll over’ your loan. A ‘roll over’ option means that you are pushing your repayment back for another month.

If you are struggling to repay your loan then avoid this at all costs.

It sounds like a great idea, but can end up being worse. If you choose the ‘roll over’ option, you will incur further interest and charges and end up owing even more money.

Top 4 Tax Benefits For Home Based Businesses

tax

Many people set up their home based business and work at the comfort of their home. They are unaware of the fact that they can get various tax benefits working at home. The best part of working at home is that you can start availing these taxes as soon as you start working. You might leave your full time job to work start your own set up.

Below mentioned are a few tax benefits, which you can enjoy working at home:

  1. Vehicle deduction

This is amongst the most complicated tax benefits, which you get working from home. In order to avail these benefits, you need to maintain the diary and keep the details of travel, maintenance costs and mileage information. Based on this information, you will be able to get the tax benefits while working at home. You should determine for how much time you use your vehicle for your home based business. You will be able to live a stress free life after getting this deduction.

  1. Entertainment and meals deduction

You need to keep proper documentation to become available for this tax deduction. You need to keep the record and receipt about the costs associated with the entertainment and meals. This way, you can submit the documentation with the tax department and seek the tax benefits. You should know that tax benefits are more if you entertain people at your home rather than taking them out.

  1. Home office deduction

In order to avail the tax benefits related to home office, you need to perform certain activities such as make phone calls, give training, do some paperwork and perform business related activities. This should be your administrative office from where you can perform all the functions. Besides that, there should not be any other branch where you perform administrative tasks. A specific part of your home would be used for your business only. You can get the tax benefits if you meet these criteria for your home office.

  1. Medical expenses

You need to employ your spouse to take advantage of this tax benefit. You can buy comprehensive family medical plan. It is recommended to contact the attorney who has complete knowledge about tax benefits for medical expenses. He can speak with the insurance company on your behalf and help you with the most suitable option.

A lot of attorneys are available in the market and the best ones are brought to you by utah.instanttaxattorney.com.

Author Bio

Jessica is well versed with the finance related topics and can write on them. Her articles are of highest quality and well researched.

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.

Can You Afford To Invest In Property? Your Questions Answered

invest in property

Image via Flickr

If there is one way, you can ensure that you have a stable future it is by investing in property. When you get on the property ladder, you are making the decision to plan for the future. Many people don’t bother to think about the future, but you should always plan for every eventuality. If you have considered buying a house in the past, why not just go for it? Here are some of the most-common questions about property.

Why should you invest in property?

This question is one that everybody asks all the time. Sometimes people think that investing in property is a waste of time. After all, it is easy to rent a house, so why bother buying one? When you invest in property, you are saving money. If you put money into a house, you are building equity for yourself. If you ever need that money again, you can choose to release some equity. Doing so will mean that you can get a lump sum in no time at all. Having a property also means that you have something to pass on to your children when you’re gone.

Who can invest in property?

You might think that you can’t afford to invest in property, but you can. It is likely that you are wasting hundreds of dollars every month on rent, when you could be paying a mortgage instead. The average rent on a house is less than the average mortgage. If you are living with a partner, you will find that getting a mortgage works out cheaper for both of you. Talk to a financial adviser about whether you can afford a property on your current salary.

What properties are good investments?

The answer is that all properties are good investments, but some are a little better than others. When you are buying a property, you need to think about what money you can make from it. A great investment property is one which will help you make a few income streams. For example, if you buy a property that you can rent out when you’re not there, you can make a decent amount of money from it. You should also look for properties that will increase in value over time. If you buy a property in an area that is likely to develop over the next ten years, you can make a huge profit on your property. You can look at council plans online and see whether they have any developments in store for a certain region. Using that insider information, could make you some serious money.

How will you get a mortgage?

If you have a poor credit history, you may worry about how you will get a mortgage. That is only natural. It is tricky to get a mortgage when you have bad credit, but that is not to say that it is impossible. You should talk to the bank about your credit situation. There are ways that you can start building yourself a strong credit history. If you use a credit card on large purchases and make sure that you keep up with your card payments, you will start to build a credit history

How will debt impact your investment?

When you’re in debt, it will be more difficult to get a mortgage than when you’re not. You need to be honest about your financial situation when you talk to advisers. You may have to pay a larger deposit than other people by way of insurance when you get a mortgage. There are ways that you can still get a mortgage though so don’t panic. Some companies specialize in giving people in debt mortgages, and so you should make sure that you look for one of those.

How Can A Merchant Account Make Your Business Successful?

Prepaid Credit Card
Prepaid Credit Card

The vigilant business owner spends every waking hour looking for new and better ways to make his or her business more successful. When you decided to open a business of your own, you lost that luxury of simply “being off” of work. Instead, your life is a 24/7, 365 journey filled with business.

To the regular employee, this may seem daunting or even down-right depressing. For a dedicated entrepreneur, there is nothing more exciting. These individuals feel a connection to their business and as the company grows it is as if they are growing as well. They take every action they can to ensure that their business succeeds and tirelessly work towards their goals.

If you hope to get the most out of your business, you will need to explore small business merchant accounts.

Credit Cards are Necessary

You’ve probably heard it a thousand times before, but it never hurts to say it again. Modern businesses need to accept credit cards if they hope to survive. Every year, more credit card transactions are made than the year before and some have even gone as far as to suggest that eventually paper currency will stop altogether. Though that may be a bit premature to worry about now, it is not premature to start accepting credit cards.

People rely on their credit cards today to make most major purposes and that is not going to change anytime soon. In fact, many individuals will simply avoid an establishment if they know it does not accept cards. It is a convenience, and people do not want to give up their modern conveniences.

Easier Accounting Solutions

Beyond simply allowing your business to accept credit cards, small business merchant accounts help to smooth out your bookkeeping process. Instead of having to manually enter transactions or record them in a separate program, this will automatically track your credit card sales. This makes it easier for your bookkeeper to manage the day to day financing, and helps cut back on the amount of time needed to keep up with everything.

If you work with the right company, these reports can be extremely detailed, breaking down what types of cards were used, the average purchase made, and a variety of other helpful metrics. This can save you a lot of money and time and help to make more effectively marketing strategies in the future. Remember though, not all companies are created equal, so you must find the right partner if you hope to get the most out of small business merchant accounts.

Finding the Right Company

Ultimately, one of the most important aspects of small business merchant accounts is finding a company that will maximize your profit while helping to keep your business running smoothly. To do this, make sure you are working with a business that offers its costs up front. Look for advanced reporting metrics that are easily available and transparent fee structures.

When you can find the right merchant account provider, your small business will start gaining more momentum than you ever thought possible.

 

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

reverse_mortgage

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.