Have you decided to finance your purchase, but do not know where to start? Elika Associates have all the resources you need. Start with the section on bad credit mortgages and you will get all the information needed to help you better understand your options. Below you will find other mortgage related questions that many buyers' have asked.
I have no credit history and I'm told
I can only get a mortgage loan with high interest
rates
Consider whether you need to buy right away. If you can wait to buy then don't rush into your purchase. Rather take the time to get a department store credit card. The other option is to consider a small, short-term loan from a bank or credit union of about six months to a year. Make sure you make regular payments on time; this will enable you to establish good credit in just a few years. While building up your credit history you can also work on saving money for a down payment, ultimately giving you a better chance when re-entering the property market.
You can expect to pay a higher interest premium if you need to buy right away. This is because your lender doesn't know how you will handle the loan. Nevertheless, don't get discouraged, no matter what your credit still try and get the best deal possible. It can be a good idea to try a mortgage broker who you can show your stability like a good job and regular pay to and there is the possibility of advancement due to their contacts. Be aware that your interest rate may still be higher than those with good credit history.
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How do I know I'm getting the best deal?
Doing your own homework is the only way to know you are getting the best mortgage deal. Have you checked free quotes online? Have you talked to other lenders? Have you talked to a mortgage broker? After reviewing just a few sites, you will acquire a wealth of information about your proposed mortgage deal.
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I'm buying my first home and I need help.
When buying a New York City apartment you will have the free services of a real estate agent since the seller is paying for the agent's commission. Take the time to interview several real estate agents. Each agent will be able to give you some useful information on the real estate market.
You should also talk with your financial institution or bank, they can provide valuable information from these sources. While talking with them you can also get mortgage pre-approval. This way you can determine what budget you are working with and whether or not you are ready for the big step of buying a home; including whether or not you are in a realistic financial situation to buy a home.
So what if you found the perfect property and you're in a hurry to make a purchase? Take a moment to read our section on buying a home. Here you will find valuable information and tips.
If you can take your time when buying a home and inform yourself as much as possible so that you know exactly what you are getting into. Buying a home is probably the biggest purchase you will ever make so it pays to take the time to look for the best deal.
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What if I've heard bad things about my lender?
It is a good idea that you don't sign your mortgage papers yet.
Rather take the time to review the consumer feedback of other mortgage lenders. You should also make sure your mortgage lender has the financial stability necessary to offer you a loan by checking with financial rating companies. Sometimes bad customer service can come from financial pressures within an organization.
If you've already signed your loan papers and are making payments to the lender then you still have choices. First, you need to make sure you continue to make on time payments. Make sure you keep thorough payment records whether you have a reputable lender or not. This way you will have the data you need to back you up in the event of a dispute.
If you are concerned about your lenders procedures then you need to get legal advice. For help you can try a consumer watchdog group. Often when a company is put on the spot or placed in the media then many lending companies will choose to do the right thing.
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What is a "non-conforming" mortgage?
Non conforming means a mortgage that doesn't follow the standard underwriting practices of other mortgages. This is often because an individual has either bad credit or no credit history.
If someone mentions this to you then don't be concerned. This means you may have to pay greater interest, but you will still be able to get a mortgage.
However, if you are offered a non-conforming mortgage loan it is important to get several quotes first whether they are from an online source or several mortgage brokers. Be sure to consider all your available options. Remember lenders are competing for your business and this allows you to get the best possible deal.
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What are my payment options and what are the differences?
There are various payment options and they normally allow you to make extra payments or choose to increase the amount of your payments. This helps as when you make an extra payment or increase your amount, you will be able to pay off the total amount of your loan sooner.
The difference in payments can be significant. You will have a better chance of making payments if your lender makes your payment plans flexible and achievable.
To understand this let us consider an example. Often lenders give you just one day on the anniversary date of your mortgage to make a lump sum payment. Therefore, even if you have extra money you may not be able to make your extra payment. As a result, you spend the money and then don't have it when you need to make your lump sum payment. By making lump sum payments at any time you can significantly reduce how much you pay on your mortgage loan.
Then there are lenders that allow individuals to increase their payments. Some lenders will only allow you to make double payments. So what happens if you can afford to pay extra money, but not enough to make a double payment? While just a little bit may not seem like a lot, it can easily reduce the principal of your mortgage by hundreds of dollars in a year. Over thirty years this will save you thousands of dollars in interest. You may also be able to pay off your mortgage years earlier.
When it comes to a mortgage loan, you need to get the best payment options while not giving up the chance to get the best interest rates.
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Why should I check the stability of my lender through
a ratings company?
Should your lender become insolvent there is the chance that your loan will be due and payable immediately in order to pay off the creditors of your lender. While you could get a mortgage with another lender in order to get rid of this problem you will face a lot of financial strain and stress.
In addition, if a lender starts to have financial issues then they may not keep good records. If good records aren't kept then it may appear as if you owe more money than you actually do and as a result, you may end up paying for the same debt twice.
These problems are a lot less likely to occur if you choose a financially stable lender.
Even if your lender appears financially stable, it is a good idea to keep close records on your mortgage payments. Even the best lenders can lose the occasional record and you don't want to be billed for more money than you really owe.
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Is it better to go with my bank even if they have
a higher percent?
No it's not, while you may prefer your bank you can pay considerably more during the life of your mortgage with as much as one percent difference.
However, it pays to check a few numbers before going somewhere else for a mortgage. If moving your mortgage loan to a new bank cause fees that exceed your savings from a lower interest rate then you may want to stick with your bank. It is also important to consider the payment options available, does one lender offer better payment options? Make sure your payment options are comparable.
You also need to consider the 'hassle' factor to an extent. If you go with a new bank, you may have to set up new pre-authorized payment plans or additional paper work issues.
Therefore, if the options and numbers for a mortgage are in your favor then you should stay with your same bank. Be sure to tell your bank if you can get better rates somewhere else, tell them why you would prefer to stick with them, and then ask if they can offer a lower rate. You should also make sure you have quotes available from other lenders, if you are a good customer, most banks will want to keep you.
If the bank doesn't want to keep you then you will need to be prepared to take the next step.
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