Sunday, February 8, 2009

Getting Accepted For A Mortgage With Bad Credit History

The, current credit squeeze is affecting many mortgage borrowers, in particular, those with poor credit. Borrowers who have poor credit can still obtain a mortgage, using a company that offers 'bad credit mortgages' as a way out of debt.

Just the expression bad credit can send people running, but there is no reason for this. In the current economic climate it is very easy for anyone to fall into the bad credit debt trap.

But even in these difficult times there are still options for people with adverse credit. It is possible you may have to pay a slightly higher fee, and the broker may have to work harder for his money. But you should be able to work around any problems, to help get you a mortgage and resolve your debt situation.

To get the best results when looking for a bad credit mortgage, it is definitely advisable to engage the services of a specialist broker, as he will almost certainly get the best results for you.

This is because the specialist brokers know who to contact to make an application for a bad credit mortgage. It is essential that you are honest with the broker right from the start; if you mislead him it can only cause problems down the line. He will know how best to present your case and application to the suitable lender.

There is no reason to assume that a decent broker will not be able to help you resolve your bad debt mortgage problems and help you set your credit on the right path again.

Control your spending once you have the mortgage

Now you have a bad debt mortgage it is the best policy to try to avoid getting back into debt and repair you credit history at the same time.
Most people's wages seem to disappear without trace, you can cover the basics of may fall down as the money starts to run out at the end of the month.

The best way to deal with this problem is to set yourself a budget; most people go their entire lives without living to a set budget. But if you have had debt problems this is easily the best way to avoid it happening again.

It can be pretty scary, to set yourself limits on your spending, rather than just spending money 'as you need to'. The first and simplest thing you need to do is make a plan, you need to know exactly how much you bring home in cash every week every month.

Next you need to list all your expenses, generally all the things you can't get away from such as water and electricity, gas, transport and so on. Add those of the see how much they are in total. If you're not sure, go for the highest figure you think it is.

The next thing to do is put all your other expenses into categories. This will depend how you live your life, but basically, if you eat or drink out a lot. You could put the in a luxury category.

Then, things like food and other living expenses would be categorised as necessities. You need to be realistic, with all these estimates and make sure as far as possible it is what you actually spend each month.

Now, once you have worked out more or less what you are spending in total for absolutely everything. You can figure out how to cut down on these expenses, first, consider those essentials electricity, gas and water could you save a little money on those by cutting back a little. Perhaps switching the heating half an hour before you go to bed, rather than when you go to bed.

Could you take one more shower and one less bath each per week, how about making sure that you have all your groceries in one weekly shop. Rather than making several short trips in the car each week to the local shop to pick up 'bits and pieces'. This will save on petrol, and the cost of the things you buy.

Next consider cutting down on some of those luxuries. Instead of eating out once a week, making once a fortnight, instead of going to a drink twice a week, make it once a week. These things will add up considerable savings over the course of a month.

One last tip to help you avoid the debt trap again is to write down everything you spend, every penny. Doing this will make it very clear in your mind, just how much you are spending on individual items. Over a few months you will learn that a pound here and the pound there can definitely add up to a considerable amount of money and plunge you back into debt again.

Are Sell And Rent Back Schemes A Rip Off?

There is no doubt that banks and other lenders are making it more difficult to borrow money to finance a mortgage. Thousands of consumers across the country are starting to realise that loan companies, banks, credit card companies and mortgage lenders are slowly choking the supply of available cash.

First-time buyers are finding it more difficult to save a reasonable sized deposit, and even when they do it can sometimes be a strain to get a reasonable mortgage offer. In addition, many first-time buyers, who took out their mortgage two or three years ago, find it difficult to place a remortgage.

This all this began, last year over in America, with the so-called sub-prime mortgage crisis. This crisis rippled around the world, as many of the companies who were putting money into this risky market, were based all on other continents including Europe and the UK.

Because so many mortgage lenders lost so much money in the crisis they either don't have the money to lend or are nervous about current lending conditions. All is not lost there are still lenders out there who can assist with mortgages and remortgages it is often just a matter of finding a competent broker.

One aspect of this crisis is that many people are turning to different measures, including the much talked about sell-and-buy-or-rent-back deals. Research has shown that where there is an affordability gap these types of deals that particularly popular, especially with younger mortgage holders.

This is a relatively new idea; even a few years ago no one sold their home, to a company then rented it back. These days its a huge business with a sizeable share of the mortgage finance market.

These schemes can be a good solution for many people having problems but the sell and rent back system but there is no doubt that this controversial way of holding on to your home is not for everybody.

There are many reasons why people turn to this system, usually when they are in a large amount of debt. They may take this option, rather than being repossessed or perhaps they're getting divorced, and can not afford the mortgage on their own.

If done through a reputable company the schemes can prove useful, although there are some less savoury operators in this market.

Last month, the dramatic change of heart by lenders, who pulled back from the under 125% mortgage market. Many companies that this within the space of just a few days with implication that they'll feel that this is now a difficult market.

This way of holding on to your house may be of benefit to many people. What is essential to find a respected company to deal with this extremely important transaction.

It should also be pointed out that there are other options such as debt consolidation mortgages and general second mortgages that can be of great assistance to many people who are having difficulties.

Sell and rent back should possibly not be the first choice for most people. Having payment difficulties or debt problems, a second mortgage may be slightly difficult to obtain, but they are available from reputable brokers.

Bad Credit Mortgages And Getting The Finance You Need

bad credit can be financially crippling when trying to apply for a credit card or a loan or even more of a problem when applying for a mortgage. Bad credit can cause many sleepless nights and family stress, while trying to acquire a mortgage for your new home.

It is very easy indeed to lose your good credit status, a few late payments, or one missed payment can seriously damage your credit rating. A couple of weeks off work, sick, or some unforeseen large payment can easily damage your credit. Making it difficult to get a mortgage for your dream home.

Many people will turn to companies that specialize in helping people repair their credit status. These people may not realize that having bad credit does not necessarily bar you from getting a mortgage. It may, make it more difficult, and a little more inconvenient, but it certainly does not mean that mortgage is beyond your reach.

A bad credit mortgage may in fact be the best way of repairing your damage credit and regaining the confidence of lenders of all kinds. One of the main purposes of the bad credit mortgage is to repair the damaged credit score, and also get individuals back on the road to financial security.

Bad credit mortgages will give you the opportunity to show lenders and credit reporting agencies that your credit status was caused by situations outside of your control and you are in fact, well capable of making regular payments.

Making these regular payments can quickly show to lenders that you are a responsible borrower who wishes to resolve their credit history problems.

The first thing you need to do to obtain a bad credit mortgage is to find a company to lend you the money. It is not advisable to do this on your own unless you have considerable knowledge of the mortgage market.

It is quick and simple to secure the services of a mortgage broker, who has the knowledge and the skill to bring you together with a quality mortgage lender who will suit your needs.

When you find a broker, you need to make him aware from the beginning that your credit is less than perfect. That way, he can save time by knowing which lenders may be suitable for your needs.

Not only can a bad credit mortgage help you to resolve your credit score problems. It can also be used to fix some of your financial credit problems as well.

By credit mortgage can be used to fund paying off some of your existing debts, such as credit cards and car loans. Lowering your monthly payments by rolling all his debts into one payment, which will be far more affordable for you.

Some companies now specialize in these kind of mortgages, and are sympathetic to people who have found themselves in difficult financial and credit situations. They understand that circumstances beyond your control may have forced you to miss a couple of payments on a credit card. But that does not necessarily make you a bad risk of paying your mortgage in a timely fashion.

There are many mortgage brokers, some of them online, who can point you in the right direction and give you lots of useful advice about how to locate the best mortgage provider for your bad credit mortgage situation.

Dig Yourself Out Of Debt With A Debt Consolidation Loan

using debt consolidation loans is a very viable way to dig yourself quickly and efficiently out of serious debt problems. Debt consolidation loans are used specifically to clear away other loans that have mounted up over time, and have now become difficult to handle.

These specialized loans will help in many ways firstly, you'll only be dealing with one creditor instead of many, this can make it much easier to manage your loans and avoid costly mistakes. You will usually get a much lower rate of interest on the one loan than higher interest rates that are normal on store cards, credit cards and other types of short-term loan.

Companies that offer from debt consolidation loans are already experienced in dealing with people who have had a few credit problems, and a few financial hick-ups along the way. Problems like missed payments or late payments are familiar to them, and so they are much more understanding about this kind of minor oversight.

Possibly, your credit score may be a little lower than other lenders would like, a debt consolidation loan company will be far more easygoing about a lower credit rating. Unlike other lenders they also understand that you have debts that you cannot manage and you are in need of assistance to lower your interest rates. And most importantly, lower the total amount you pay every month.

You can resolve the situation, if you contact a broker, who is a specialist in this field, and his familiar with companies that offer suitable loans for your situation. He will know which companies to place your application with.

Because the broker and the lender have so much experience with people who are struggling with large debts. They will deliberately tailor the loan to suit your financial situation. They will spread the payment period over as long as is reasonably necessary to bring the monthly payment amount down to a figure that you can afford without breaking the bank each month.

Usually debt consolidation loans are offered to homeowners as secured loans. With this type of loan, they will request to sign papers that secure the money that they will loan you against your property. You'll find that the interest rate will be slightly higher than one obtained from a regular high street bank or building society.

On the other hand, you will find that they are quite likely to offer you a loan, where your bank will not. Even though you are having payment difficulties you should still seek out the best possible deal available that will save you the most money on your repayments.

These loans will help you to clear your existing debts in a reasonable period of time, without overstretching your available cash.

You will save money, because this single loan will cost far less than you would be paying with all your other loans combined together, the interest rate is much lower and the payments will be much easier to deal with.

You will find there will be some charges made by some of your existing loan companies. They charge this because they are losing money by not charging you a large amount of interest over the period that you originally agreed to. So they will be loosing out on all the money they should have made from you.

Paying off the minimum each month on a credit card, it will take you 20 to 25 years to clear that debt. The same amount with a debt consolidation loan will be cleared much faster and much less cost to you.
Remember that the total you pay each month will probably be a fraction of what you would have to pay, if you continued to pay your cards and your other debts each month.

A good broker will be able to give you a couple of options with different companies that best suit your needs and can offer the best interest rate, and lowest monthly payments available.

He can advise you on any questions you may have about these companies are about the loan itself. You can also assist you with repairing your damaged credit over time.

Tips For Protecting Your Mortgage Against Accident, Sickness And Unemployment

when you buy a home and take on a mortgage, you expect to be able to make the payments. Times are uncertain though, and many unexpected events can occur knock you off track.

If you fall ill or are unable to work because of an injury, you may be unable to make your mortgage payments. If you are made redundant at work, you could face losing your home because you can't keep up with your mortgage repayments. That's why many mortgage companies suggest that you buy mortgage payment protection insurance. It works like any other insurance - you pay an annual premium, and if you are unable to make your home loan payments for any covered reason, the insurance policy will meet payments (for you for up to 12 months with most policies).

PPI and MPPI - payment protection insurance and Mortgage Payment Protection Insurance - have come under increasing fire here in the UK. Last year, the FSA asked the Competition Commission to look into the market for PPI and make recommendations regarding the market for mortgage protection and other payment protection insurance. The issues have to do with the outrageously high costs and alleged dodgy sales practices around most payment protection insurance.

According to the recently released report on Emerging Thinking from the Competition Commission, the PPI industry rakes in nearly £4bn in premiums each year, just under 25% of it in MPPI - payment insurance for first charge and second charge mortgages. That's £1bn a year in mortgage insurance taken out - yet according to critics of the industry, only 10-20% of that is ever paid out in claims, making a tidy 80% profit for the insurers. Furthermore, the critics continue, the industry uses deceptive sales methods, and the policies include clauses that make it almost impossible for most people to collect.

In light of all the criticism leveled against the PPI industry, though, is mortgage payment insurance a wise use of your money? In some cases, you'll end up paying nearly as much or more for your payment protection cover than you do in interest payments on your mortgage. Despite that, it's important to find a way to protect your home and the loan secured against it. If not MPPI, what can you do to insure yourself against losing your home in case of accident, illness or unemployment?

- High interest savings account

One suggestion made by many financial experts is to self-insure by depositing the amount you'd pay for mortgage payment insurance in a high interest savings account to be held specifically in case you can't meet your monthly loan repayments for some reason. The added benefit - if you neer need to touch it, you'll have the additional savings toward your retirement or other goals once your mortgage is paid off.

- Disability Insurance

Another option for protecting your insurance payment is to insure yourself against loss of income. Disability insurance pays you a percentage of your income if you become disabled and unable to work. You can use that insurance payment to make your mortgage repayments and meet your other bills and accounts. In general, the insurance premiums for disability insurance are lower than for payment protection insurance, and it doesn't cover you in case of unemployment.

- Buy from an independent insurer

If you do decide that payment protection insurance is right for you, shop around to get the best deals. It may be tempting or make sense to buy your MPPI from your bank or mortgage lender, but you could end up paying twice as much for the same cover. By law, your mortgage company may offer MPPI, but they may not require you to carry their insurance as a condition of your loan. According to the latest figures, shopping around and buying your MPPI from an independent insurer can save you tens of thousands of pounds over the life of your mortgage.

Choosing An Insurance Company

To insure is to assure”, says the catch line of a prominent ad of an insurance company. Insurance enables people to recover their losses in case of an unfortunate accident or loss. By obtaining an insurance policy, you can protect yourself from any form of risk to your life, property, health, or commodities.

Typically, there are several types of insurance; some of the most common ones being life insurance, health insurance, auto insurance, property insurance, and travel insurance. While health insurance takes care of your financial needs during an illness or injury, car insurance takes care of the loss or damages to your vehicle, depending on the type of car insurance selected. However, it can be a daunting task for most people to choose a suitable insurance company from the myriad companies in the market. Therefore, it is advisable to select an insurance company based on certain parameters to get the most from your insurance policy.

Compare Insurance Rates

Rates have always been a vital deciding factor while selecting an insurance company. You can obtain online quotes of various companies that offer policies providing the same type of coverage. This will facilitate easy comparison and help you to get a clearer picture of the current insurance scenario.

Company Credibility

You may come across insurance companies that offer the same type of coverage you require, but at an unbelievably low price. In such a case, it is advisable to check the credibility of the company and inquire why their rates are so low. You can check on the reputation of a particular insurance company through the Better Business Bureau. It could be possible that the company exclusively sells only that type of insurance and is specialized in that particular form of coverage. Another reason could be that the company is relatively new in the insurance market. New companies usually offer lower insurance premiums simply to carve their niche in the insurance market.

Agents and Insurance brokers

If you are new to the insurance market, it may help to obtain the services of a skilled insurance broker. Insurance brokers have in-depth knowledge of changing trends in the insurance industry and can guide you to select an appropriate insurance policy. Many reputed companies sell their policies through their own network of insurance agents. These agents analyze your insurance requirements and accordingly guide you to a suitable plan.

Full Disclosure of any pre-existing conditions

Before purchasing any type of insurance, it is important for customers to divulge all relevant details to the insurance company. If you are buying a health insurance, for example, it is essential to mention any pre-existing medical conditions in your application. In any case, the underwriter, who processes the applications, will surely look into your history and find out about any such conditions.

You are the best judge

It is important that you evaluate the odds of opting for any particular insurance company or coverage. After assessing all your insurance requirements and the terms and conditions applicable for the necessary coverage, you can select an insurance company accordingly. Also, make sure that the company you choose offers you the flexibility of increasing your coverage options as per your changing needs.

Double-check that you have obtained adequate information about deductibles, add-ons and tax benefits, as each company differs in the benefits and features offered. It is important to read and understand the small print before finalizing on a choice. A couple of other factors to consider when choosing coverage are: customer service and rate increases.

Assure for yourself a future free from the insecurities of life by not only insuring your life and property, but by also ensuring that you get the right kind of insurance policy.