Archive for the ‘cash loans’ Category

Is Home Buying Still Possible With a Bad Credit Record?

Tuesday, November 22nd, 2011

Your credit history has a lot to do with your home buying success. It is because securing financing for your purchase will involve getting your credit history scrutinized. If your credit is bad, your chances of securing a loan will be lowered. However, there are ways you can still buy a house even when your credit score is less than ideal.

Is Home Buying Still Possible With a Bad Credit Record?

What causes your credit score to tumble?

Foreclosure is one way of pulling your credit score down, while a bankruptcy filing is another. If you had filed for bankruptcy, the negative impact on your credit report will remain for as long as 10 years. Unpaid bills and credit card debts and other financial obligations that you have failed to address can also bring your credit score down, but the worse impact will come from foreclosure and bankruptcy.

Loans available

If you intend to buy a home despite having a poor credit score, one of your options will be the FHA loan. This government loan does not give much weight on credit scores, particularly for applicants who are first time homebuyers. However, if you have been foreclosed on, you will have to wait two years after the takeover of your property to secure financing from the FHA.

Another option that you can explore is the one offered by so-called hard-money lenders. These are not the same as subprime lenders who have been largely blamed for the housing industry downturn. Hard-money lenders are mostly willing to issue loans half a year after a bankruptcy filing or a foreclosure, but will require a higher down payment. The down payment may range from 20% to as high as 35% of the actual amount of the loan.

Cash loans are another possible alternative. Cash loans are easier to acquire than mortgage loans and you can use the money to purchase a property in cash. This can also come from family members or relatives who have the means to lend you the money you need. The good thing about loans from family members is that you may be able to agree on a no-interest type of loan, although this will depend on how much money your relative has and how close your relationship is with them.

Improving credit scores

If you are not in a hurry to buy a house and you have not been foreclosed on or filed for a bankruptcy, you may opt for the usual mortgage loan route, but work on your credit score first before applying for one. The first thing you need to do is to pay as much of your debts as you possibly can.

You also need to have a steady source of income for at least two years or prove that you have a regular job. Paying bills on time and not incurring late payment fees will also help improve your credit records. It may take you half a year or the better part of a whole year before you can get your credit score back up again, but it will be safer and will be better for your home buying chances in the long run.

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Prevent Cash Advance Loans If You Wish To Stop Foreclosure

Saturday, November 12th, 2011

With foreclosures at historically high rates across the country, some homeowners really feel that they’ve no other option to save their home other than taking out much more loans. Some end up taking out payday advance loans, which is virtually universally a poor idea for individuals facing a economic hardship or foreclosure. A growing use of these loans will delay any recovery in the economy, as opposed to stimulate growth.

As soon as homeowners take out a payday loan to create the mortgage, they are able to rapidly fall into a cycle of not having adequate income to pay back one or the other, after which not having adequate cash to pay back either loan. Even if the loan is only a few hundred dollars, interest rates can be many hundred percent, along with the term with the loan is commonly quite brief. Homeowners could not want to put themselves in a position where they only have two weeks to pay repay a loan with an annual 800% interest price.

On the other hand, the rise of this kind of loan is coinciding with all the decline in lending by classic sources. Banks are experiencing their very own credit crisis, and homeowners who purchased or refinanced a residence within the past couple of years may well not have sufficient equity for a or other solution. Therefore, increasingly desperate homeowners in danger of foreclosure are turning towards the money advance and payday loan outlets, as opposed to attempting to work using a bank which is no longer responsive to their credit needs.

What should not surprise too numerous people, though, is that the banks also have ownership interests in these payday loan providers. Standard lenders might not own them outright, but they do profit when homeowners take out short-term loans with astronomical interest rates as a way to pay back their long-term mortgages with lower (but increasing) rates. Banks profit from producing poor loans to people that can not afford the loan, and then make much more funds when these mortgages go into default and the homeowners turn to payday loans to stay afloat.

The homeowners then may wind up with both their foreclosing bank and also the payday loan outlet aggressively attempting to collect on these loans. Even if they’re able to discover a technique to on the house, the money advance loan may well push them into danger of , collections, or further judgments and lawsuits. We have received emails from homeowners in precisely this situation, who first had taken out several payday loans in order to pay the mortgage, but ended up getting to take out a lot more of them just to pay back the previous ones. This may possibly go on for many years before their savings are fully wiped out and they are able to no longer maintain on leading of their finances.

The propensity of people who are unable to manage their finances, with or without having a hardship, and the boost in reliance on payday loans will only make the foreclosure crisis worse. It truly is no wonder banks are unwilling to function with homeowners to stop foreclosure, although, as they are going to make money when these households take out cash advances on their paychecks in order to pay the mortgage. Homeowners who’ve been taken benefit of in their mortgage loan ought to be extremely cautious of becoming taken for one more scam through feeling as if they’ve no other option than to take out a payday loan.

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