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Archive for July, 2009

Question about home mortgage?

I am loking to move to another state and am looking to buy a townhome. I would like to get a no money down loan. My credit score is 550 and my wifes 650. What options are there to get a no money down loan? Please only respond with usefulle knowledge. thanks

I’m sorry, but with such low credit scores, and with the subprime mortgage market collapsing, I think it’s very unlikely you will find a reputable lender to give you such a mortgage. No money down means there is no protection for the bank if you stop paying because you’ve borrowed the entire price of the house.

current interest rates?

I have been trying to use some of these mortgage calculators and the default interest rates are around 8%…what is a reasonable interest rate for first time homebuyers with not great credit but a good income to debt ratio? And how much does credit score effect your interest rates

Here are the going rates for mortgages, this is if you have very good credit

http://bankrate.com/brm/rate/mtg_home.asp

Here is an article that demonstrates how much interest rates change for given FICO scores, although this uses data from a year ago.

http://www.bankrate.com/brm/news/Financial_Literacy/March07_credit_score_mortgage_a1.asp

Ultimately it’s up to each individual bank and how much risk they are willing to take. Right now, they don’t want much/any risk so 8% might be the best you could get.

Learn How to Buy a Car With Bad Credit

As you have perhaps learnt, borrowing isn’t the best thing to do despite it being unavoidable at times. Pause and congratulate yourself if you have taken steps to mend your credit and now you know that it’s not easy. Repairing credit takes a while and requires willpower.

For that reason, this may not be the time to buy a car. Examine all your options; are you simply on an envious streak? Strictly examine the logic behind desiring a new car; are there options? Is public transport accessible? You may be surprised that public transport is available and maybe even very convenient for you. Just to give you food for thought, public transit is better for the environment too. If you’re buying a new car because you reckon your present car is practically falling apart, find out how much longer your current car might last. May be you will be pleasantly surprised at how long some cars can last.

But if it becomes apparent that none of these options are feasible for you and you have no option but to buy a car it is indeed time to buy a car. There are things you can do. As you plan on how to finance the car purchase bear in mind how your credit got in bad shape. It will be especially wise not to take out any other lines of credit, for two reasons. First of all, you will most likely be presented with a disadvantageous interest rate for any loan you’re granted. Secondly, it’s counterproductive to open new accounts while trying to get your credit under control. How do you take control of something that you keep adding more to?

Before leaping into a new loan with a commercial lender, look around and try to benefit from any assets you have on hand. Do you have friends or relatives who might lend you some cash? Do you have a retirement account which you can use as a guarantee on a secure loan? Secure loans result in lower interest rates and high chances of approval given that they are secured by collateral. Note that if you default on the payments, the lender has the legal right to withdraw cash from the retirement account or whatever other account was used as collateral. Many alternatives are open to an ingenious person prepared to look at the situation from all angles. Who knows; your great uncle may be in possession of an operational car parked in his garage that he wouldn’t mind offloading to you.

If all these options don’t work, it maybe time to look at dealerships and private sellers. Check with your bank or credit union and see if they have any kind of loan product on hand to consumers who are in the course of mending their credit. In any case, bad credit is an increasingly frequent incidence. Some lenders are adjusting accordingly with the loan products they offer.

Finally, believe me there’s no shame in buying a car that’s a bit below your expectations. This is not the time to buy the luxury vehicle you have always wanted. self-control is of the essence right now. There will be time after your credit is adequately repaired, to get a car that’s more to your taste. Achieving a better credit score will be worthwhile in the end.

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