The first step in your preparation for obtaining a mortgage is to make a determination of the amount of money you can afford to pay each month. If you take a month to track what it takes to handle all your household expenses and find out how much is left, you will have some idea how much can be applied toward the mortgage payment. Use a notebook and record every expense you have each day and include descriptions and the total amount spent on each transaction. If you keep an accurate record, you will be able to see where your money goes and then you can decide whether it is a necessity or simply a wanted item. By doing this, you should be able to cut down on some expenses or possibly eliminate them completely.
If you are able to change your pattern of spending by eliminating unnecessary expenses, you will have extra money to put into savings to go toward a down payment on a home. This money should be put in a separate savings account so you can earmark it for the single goal of a down payment for your house. If you put as much of your disposable income after necessary expenses into this account, you could quickly reach your goal of a down payment amount. Lending experts agree that a minimum of 20% of the total cost of the home is what you should make an effort to save.
You can prepare for a mortgage loan by cutting back or completely stopping the use of your credit cards. The only exception to this should be when you know the amount of the balance can be paid off each month.
After you have saved a good amount for the down payment on a mortgage, you will need to get a copy of your credit report. This can be obtained free of charge through a major credit bureau once a year. With this report, you can find out if your current credit score will allow you to qualify for a home loan. The credit report will also enable you to estimate what the probable interest rate may be for your loan. A higher score will get a lower interest rate, and if your score is low the interest will in all probability be several points higher.
Friday, April 20, 2012
how and when to compare mortgages
The mortgage rate of interest is probably the main element to consider when you compare mortgages. This determines how much over and above the actual amount borrowed you will pay back. When it comes to the rate of interest you will have to pay for your mortgage then your credit rating goes a long way to determining this. If your credit rating is excellent then you will get the most attractive rates. However if yours is poor then you could still get a mortgage but the interest rates might be higher. The interest rates will also depend on the type of mortgage you are going for.
There are many mortgage types to consider such as the first time buyer mortgages, self certification mortgages, buy to let mortgages, capped mortgages, discount mortgages, fixed rate mortgages. A first time buyer mortgage is a relatively easy mortgage to secure as it takes into consideration the problems facing first time buyers.
If you want to get the best deal then it is essential that you get several quotes. One of the easiest ways to get quotes all in one place is to go with a specialist website and make a search with some of the top lenders. By doing so you can be sure that you have searched the whole of the marketplace and have got the best deal possible.
It is also best to ask colleagues, friends and family on their previous experiences with mortgage lenders and whether they would be able to recommend one. Start from this list, call and schedule consultations in order to be able to determine which ones will be able to meet your needs. Compare mortgage lenders based on the loan terms, interests, closure fees and payments, service charges and the like. Based on your expected monthly income, regular and planned future expenses in the coming months assess your financial capabilities and try to match this with what the mortgage lenders are offering. This way you will be able to manage your finances efficiently.
Using a mortgage calculator will show you what to expect. You can see how interest rates and your purchase price affect your monthly and yearly budget. This is a great way to set a realistic budget and compare mortgage quotes. Any time you receive a quote or information on a possible quote, use the mortgage calculator to see how it adds up.
Also, try to get help from a mortgage expert. A mortgage expert will be able to take a look at your credit file and help you compare mortgages that you can be approved for. If your financial picture is less than perfect, he or she can offer advice to help you clean up your credit and purchase a home in the future
There are many mortgage types to consider such as the first time buyer mortgages, self certification mortgages, buy to let mortgages, capped mortgages, discount mortgages, fixed rate mortgages. A first time buyer mortgage is a relatively easy mortgage to secure as it takes into consideration the problems facing first time buyers.
If you want to get the best deal then it is essential that you get several quotes. One of the easiest ways to get quotes all in one place is to go with a specialist website and make a search with some of the top lenders. By doing so you can be sure that you have searched the whole of the marketplace and have got the best deal possible.
It is also best to ask colleagues, friends and family on their previous experiences with mortgage lenders and whether they would be able to recommend one. Start from this list, call and schedule consultations in order to be able to determine which ones will be able to meet your needs. Compare mortgage lenders based on the loan terms, interests, closure fees and payments, service charges and the like. Based on your expected monthly income, regular and planned future expenses in the coming months assess your financial capabilities and try to match this with what the mortgage lenders are offering. This way you will be able to manage your finances efficiently.
Using a mortgage calculator will show you what to expect. You can see how interest rates and your purchase price affect your monthly and yearly budget. This is a great way to set a realistic budget and compare mortgage quotes. Any time you receive a quote or information on a possible quote, use the mortgage calculator to see how it adds up.
Also, try to get help from a mortgage expert. A mortgage expert will be able to take a look at your credit file and help you compare mortgages that you can be approved for. If your financial picture is less than perfect, he or she can offer advice to help you clean up your credit and purchase a home in the future
how to get good mortgage with bd credit history
The first step to getting a mortgage with bad credit is understanding how credit scores actually work, and why they affect your ability to get a mortgage.
Your credit score is based on several different factors, the amount of available credit you have, how much of the available credit you have used, the length of your credit history, your employment history, and whether you pay bills and debt repayments on time. Your credit rating is a number between 300 and 850, with 850 being the best credit score you can achieve.
As far as lenders are concerned, anyone with a credit rating of 700 or more is a “good risk,” meaning someone who is likely to make mortgage repayments on time every month until the loan has been repaid. Below that level, lenders consider you are more of a risk in terms of whether or not you will continue to make payments on time. If your credit score is below around 620, you’ll find it difficult to get an affordable mortgage, and below 500, most lenders aren’t willing to offer loans at all.
Repairing Your Bad Credit
So what can you do if you have bad credit? First, know that if you have bad credit and you want to apply for a mortgage, it’s important to do whatever you can to repair your credit before you apply. A second important point is that it can take six months to a year to rebuild bad credit enough that it will positively affect your ability to get a mortgage. So it’s also vital that you’re willing to be patient, and take the time to repair your credit before applying.
Repairing bad credit has two main steps: first, check your credit report for errors, and second, repairing any damage done.
To check your credit score for errors, simply obtain a copy of your report from one of the three main credit-reporting agencies – Equifax, Experian and TransUnion. Examine the report thoroughly, and check for errors or out-of-date information. Even a single error can reduce your score by a significant margin, so this is a worthwhile step to take. To fix the error, call the creditor involved and explain why you think the item should be removed from your report. Make sure the creditor agrees to send you a letter verifying that the item was removed, to provide proof for the credit bureau.
Next, it’s time to start repairing your credit score. The most effective way to do this is simply to pay your bills on time, and keep your debt total low, while maintaining a small amount of available credit. Lenders like to see a fairly small amount of available credit, with a wide gap between the amount of credit you have, and the amount you actually use. Another point lenders look for is a long credit history, so if you have old credit card accounts that are in good standing, keep those open and active in preference to newer accounts.
Your credit score is based on several different factors, the amount of available credit you have, how much of the available credit you have used, the length of your credit history, your employment history, and whether you pay bills and debt repayments on time. Your credit rating is a number between 300 and 850, with 850 being the best credit score you can achieve.
As far as lenders are concerned, anyone with a credit rating of 700 or more is a “good risk,” meaning someone who is likely to make mortgage repayments on time every month until the loan has been repaid. Below that level, lenders consider you are more of a risk in terms of whether or not you will continue to make payments on time. If your credit score is below around 620, you’ll find it difficult to get an affordable mortgage, and below 500, most lenders aren’t willing to offer loans at all.
Repairing Your Bad Credit
So what can you do if you have bad credit? First, know that if you have bad credit and you want to apply for a mortgage, it’s important to do whatever you can to repair your credit before you apply. A second important point is that it can take six months to a year to rebuild bad credit enough that it will positively affect your ability to get a mortgage. So it’s also vital that you’re willing to be patient, and take the time to repair your credit before applying.
Repairing bad credit has two main steps: first, check your credit report for errors, and second, repairing any damage done.
To check your credit score for errors, simply obtain a copy of your report from one of the three main credit-reporting agencies – Equifax, Experian and TransUnion. Examine the report thoroughly, and check for errors or out-of-date information. Even a single error can reduce your score by a significant margin, so this is a worthwhile step to take. To fix the error, call the creditor involved and explain why you think the item should be removed from your report. Make sure the creditor agrees to send you a letter verifying that the item was removed, to provide proof for the credit bureau.
Next, it’s time to start repairing your credit score. The most effective way to do this is simply to pay your bills on time, and keep your debt total low, while maintaining a small amount of available credit. Lenders like to see a fairly small amount of available credit, with a wide gap between the amount of credit you have, and the amount you actually use. Another point lenders look for is a long credit history, so if you have old credit card accounts that are in good standing, keep those open and active in preference to newer accounts.
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