Thursday, November 15, 2007

The best way to compare rates

With so many different mortgage companies, so much advertising... it is difficult to make the best decision when you are looking for a new mortgage or another type of loan. We suggest that you have a look at the following option:

Thursday, April 05, 2007

A Guide To Basic Loan Terms

If you are new to the world of loans, then all the jargon and terminology can seem very confusing. There are so many different terms to understand, and unless you know some of them you will not find the best loan deal to suit your needs. If you want to know more, then here is a guide to some of the basic loan terms you might need to know.

When you borrow money in the form of a loan, the money you receive is called an advance. The more money you want to borrow, then the bigger your loan advance. It is called an advance because you are getting the money in advance of paying for it.

The APR, or Annual Percentage Rate, is the amount of interest you are charged on your loan amount. This amount is written as a percentage, and refers to the total you are charged each year. APR is one of the primary features for comparison between loans, as it is a standard measurement for all loans. The lower the APR, then the cheaper the loan interest will be.

Credit scoring
Credit scoring is a method that lenders use to determine your eligibility for a loan. They ask a series of questions about your earnings and financial situation. Each answer you give is scored, and the better your score then the more likely you are to be accepted for a loan. If you score badly then you might be declined for the loan you want.

Secured loan
A secured loan is a loan that is backed by some form of collateral. Collateral is basically a high-value item that you use to secure the loan, so that if you cannot make repayments the lender can use this item to get their money. For secured loans, the collateral tends to be your home or other property. Secured loans have lower interest rates than unsecured loans, but you risk losing your home if you do not keep up with the repayments.

Unsecured loan
An unsecured loan is the opposite of a secured loan, and requires no collateral. Instead of collateral, your credit rating and earnings are more fully taken into account. The risk to the lender is greater, so the interest rates tend to be higher. That being said, they are less of a risk to the borrower and they are usually quicker to get hold of than a secured loan.

Loan term
The loan term is the agreed time over which you will repay the loan. You will repay the loan monthly over this period until the loan and interest is fully paid back. Loan terms on personal loans usually range from about 1 to 10 years, with mortgage loan terms being longer at around 15 to 25 years. The longer the loan term, the less your monthly payments will be, but the more you will have to pay back in interest over the years.

About the Author
Peter Kenny is a writer for The Thrifty Scot Please visit us at Secured Loan and Poor Credit Loan

Tuesday, March 20, 2007

Know the Facts About Debt Consolidation

If you're like many Americans, you are looking for ways to manage your debt and save money in a way that fits your lifestyle - and debt consolidation may be the answer.

Whether you're paying off credit card debt, working on home improvements or simply need some extra cash in your pocket for the ultimate vacation, there's no better time to learn all you can about debt consolidation through mortgage refinancing and home equity loans and lines of credit.

Debt Consolidation
If you're worried about being denied a loan due to less than perfect credit, debt consolidation might be the way to go. By combining multiple loans into one single loan, you not only have a limited amount to pay each month, but the repayment period is longer. Debt consolidation improves your overall credit score by rolling all your unsecured debt into one easy secured loan, eliminating those credit "blemishes" you have accrued in the past. This makes it much easier to get approved for a home equity loan or line, mortgage refinancing or cash-out refinancing.

Home Equity Loans and Lines
Home equity loans and lines are often referred to as second mortgages, but can be in either 1st or 2nd mortgage position. By tapping into your home's equity, you can get the extra cash you need. As a bonus, the interest rate on these types of loans is usually lower - and tax deductible.
When you're choosing a home equity loan or line of credit to help with debt consolidation, you should understand that standard home equity loans offer a fixed dollar amount, paid out at the beginning of the loan, while home equity lines of credit offer flexible funds you can access as needed.

The three facets of a home loan are:
1) How much money you need to borrow or the "size" of the loan

2) The percentage rate you pay on the particular loan - which is called the "interest rate"

3) How long it will take you to pay it off - known as the "term" of the loan

Still trying to understand the basics and don't know where to start? A home equity loan calculator can be very helpful in finding out how much you can afford to borrow by helping you assess your income, current debt situation and loan information. Companies like Bank of America offer online resources such calculators and dedicated staff you can talk to immediately about home equity loans.

Mortgage Refinance
Simply put, a mortgage is a loan with a fixed or adjustable interest rate which you pay back to the bank or financial institution on a monthly basis. As the need for cash or debt consolidation arises, it is it is possible to do a mortgage refinance at a lower rate. This can also reduce your monthly payments.

Use a mortgage refinance calculator to determine how much you can afford and whether you will be able to pay the lender back. At, you'll find plenty of information about getting more cash out of your home, lowering payments through mortgage refinance and how this relates to debt consolidation.

Cash-out Refinance
Similar to a home equity loan or line, cash-out refinance is an option which allows you to borrow your equity and gain extra cash - so you can pay off your bills and make just one simple payment each month. Thus, you can replace your current mortgage with a new mortgage for a higher balance, borrowing against the value of your home. The main difference between this and a home equity loan or line is that with cash-out refinancing, you only repay one loan - your new mortgage.

With the right information, tools and advice, you can take control of your debt. So pack up the bag with text books, call the interior decorator or start planning that trip to Hawaii, because you're well on your way to financial peace of mind.

About the Author
Brit Hall is a freelance writer - and Bank of America customer - who writes articles for young adults about managing expenses, eliminating debt, and other personal finance issues.

Thursday, March 08, 2007

5 Steps To Take If Your Loan Is Denied

Before you hit the pathos of denied credit, know that there are steps you can take if your loan is denied. Here you will learn what these steps are and how to go about each one of them so the next time you apply for a loan, approval won't be too far away.

Step 1: Find out why you were denied.

The first step to any problem is to identify the root cause. Why were you denied in the first place? What were the things that were factored in which ultimately led to your denial of credit?
You need to find out the answers to all these questions first.

The good news is it won't be too difficult a task since lenders are required by federal law to tell you why you were denied credit.

The law, known as the Equal Credit Opportunity Act, mandates that all lenders and credit providers should tell you the reason for the denial. This should be done in writing and given within 30 days after such denial.

The law also requires two important pieces of information that must be included in this letter. The reasons why you were denied credit. Note that these reasons must be specific, not vague. Or, the letter may contain information on how you can obtain those reasons.

Step 2: If the reasons for the denial are based on correctable errors, then correct them.

There can be various reasons why your application for a mortgage or a loan got denied. It could be because you did not meet the creditor's minimum income requirement. Sometimes, you got denied credit because you are not at your job or address for the required amount of time.

Insufficient income is one of the most frequent reasons why consumers get denied when applying for loan applications. You may not be bringing in enough money to afford the house you want or you may not have enough funds for closing costs and a down payment.

If this is the case, correct the problem by applying for loan programs that specifically for low to moderate income borrowers. This way, you can take advantage of the lower down payment requirements that programs such as these frequently offer.

Two fine examples of such loans designed for low to moderate income borrowers are the FHA loans or VA loans.

Another reason why you might be denied credit is if you requested a loan amount that is larger than 95 percent of the appraised value of your property. If this is the scenario, then likely that loan would be denied.

Step 3: If the denial is due to poor credit report, get a free copy of your report from any of three major credit reporting agencies.

Sometimes, the reason for the denial has something to do with a poor credit history things you did in the past than things you are doing now. Your credit score may be low, leaving the lender no choice but to deny your application for a loan.

A low credit score means you are high risk and lenders are bound to think twice before approving you for a loan, since the status of your score suggests that you might not be the sort who makes payments on time, has very little credit available, too many debts, etc.

If the letter sent by the lender indicates poor credit report as the reason, then be mindful that you are actually entitled to get a free copy of your credit report from any of the three credit reporting agencies Experian, Equifax, and TransUnion. Also, note that this guaranty is only for 60 days so do not wait until after two months before you order your free credit report.

Once you get your credit report, read it carefully and make sure that it is accurate and complete.

If you find any errors, such as a fraudulent collections or a cancelled account, fix them.

Step 4: Get a second opinion.

Some lenders have divisions whose sole purpose is to reevaluate loan applications. After investigating errors in your credit report and correcting them, the investigating credit reporting agency will send the corrected copy to your lender.

Contact your lender and follow up the report with a few questions of your own. You may even request a second opinion from the lender's second level of review for loans.

Step 5: Apply for a new loan.

And finally, keep shopping. Just because you got turned down once does not mean that you are never going to get approved for a loan again. Ever. Do not get discouraged by one denial of credit.

Lenders have different approval standards. Banks and mortgages use different criteria for application approval based on their business objectives. So there is a big chance that another lender will find the right program match for you.

About the Author
If you want to get more informationen about personal finance advices, please visit my blog at


Friday, February 09, 2007

Secured Debt Consolidation Loans

When you have decided for clearing that debt- mountain off your shoulders, your first concern is how can you do it at low cost. And while you opt for consolidating debts into a new loan, you would like to take the loan at lower interest rate for paying it easily after clearing debts. For this purpose lenders have crafted secured debt consolidation loans which make the debt reduction a smooth process.

Secured debt consolidation loans offer you an opportunity for reducing debts. Through secured debt consolidation loans you can pay off all higher interest rate debts. But the debts are still there in reduced form as secured debt consolidation loan. Usually in a consolidation loan, a borrower sees the lower interest rate first as he intends to replace higher interest rate debts.

Secured debt consolidation loans ensure lower interest rate. This is because the lender offers secured debt consolidation loans against the property of the borrower. Home or any valuable property serves the purpose of collateral. Higher equity in collateral enables the borrower to take the loan at even reduced interest rate.

Secured debt consolidation loans are approved for larger repayment duration of say 25 to 30 years, though the borrower can opt for shorter duration also. As a combined effect of lower interest rate and larger repayment duration, the borrower can reduce monthly payment for secured debt consolidation loan installments substantially so that the loan can easily be repaid after the debts are cleared.

And bad credit people are approved secured debt consolidation loans without enquiries as the property of the borrower is with the lender as security. But pay off the loan installments regularly or the lender may sell the property for recovering the loan. Your credit score will move up as you pay off the loan installments and in future any loan will come at easier terms.

About the Author
Amanda Thompson understands the need for good quality loan advice. She works for the Chance for loans.To find bad credit loans,secured debt consolidation loan,secured personal loans that best suits your needs visit

Home Equity

Sunday, January 14, 2007

The Cost of a Lower Mortgage Down Payment

First-time homebuyers often have difficulty coming up with a down payment for a home loan. This is usually due to their age and income. While these homebuyers often qualify for a mortgage based on their income, debt level, and credit history, they would be denied if lenders held them to a specific down payment requirement.

Many lenders recognize this and have begun extending mortgages to homebuyers that are not able to pay the traditional 20 percent as a down payment. Not having to come up with so much money for a mortgage down payment is a good thing for home buyers. It removes much of the pressure from having to save up such a large amount of money to purchase a home.

What many lenders fail to mention is that not having a mortgage down payment can cost the homebuyer in other areas of the mortgage. Often the costs are disguised in a way that keeps homebuyers from realizing that they have been added in because of the lack of a down payment.

Increased Interest Rates Some lenders make up for the lack of a mortgage down payment in a higher interest rate. A lender can legitimately determine that you are at a higher risk of defaulting on your mortgage based on the lower down payment. In fact, there is a direct correlation between the amount a homebuyer pays in mortgage down payment and the rate of mortgage defaults. Homebuyers that pay lower mortgage down payments tend to default more than those who pay higher down payments.

To make up for the risk associated with the lower mortgage down payment, the lender can charge a higher interest rate to your loan. This increased interest rate means that the cost you pay for your loan is higher than if you had a down payment.

Private Mortgage Insurance Another way that lenders can make up for the lower mortgage down payment is through requiring you to pay private mortgage insurance. Private mortgage insurance, PMI, is required by most lenders when you pay less a mortgage down payment less than 20 percent. PMI protects the lender by paying your mortgage in the event that you are unable to.

The cost of your PMI depends on the amount of the home you purchased and the amount of your down payment. You are able to cancel the insurance once you have gained 20 percent of the mortgage through your down payment and subsequent mortgage payments.

Keep in mind that the lender isn't required by law to cancel it. In fact, some conditions can keep you from canceling the insurance even after you have reached the 20 percent mark. If you have not kept your payments current, you have other liens on the property, or you have a high risk loan, you may not be able to cancel your PMI after you have gained 20 percent in equity.

Even though you don't save up thousands of dollars for a mortgage down payment upfront, you can still end up paying these same thousands in increased interest and private mortgage insurance.

About the Author
Blair Gwilt is the owner of the website,
Starting Real Estate Investing. For a free ebook about no money down real estate investing, go to, How To Invest In No Money Down Property


Saturday, January 06, 2007

Bad Credit Personal Loans

At some point during most people's lives there comes a time when borrowing money is the only option. This may be to buy a house, a car, for home improvements or simply to consolidate debts. Persuading financial organizations to lend money, especially large amounts, is easier for some customers than others.

Those who find borrowing particularly difficult are people with a bad credit history. Bad credit includes County Court Judgments (CCJS), decrees and past credit history problems.

However, not all is lost is for people with a credit histor, for they can avail credit personal loans. Never hear of it! Do not worry, we will tell you all about credit personal loans.

A credit personal loan is like any other personal loan that one might have availed of in the past. The only difference is that it is for those people who have a bad credit, or in simpler terms, people with a credit history. There are numerous lenders who are ready to give a personal loan if one has a bad credit history.

These lenders however, usually require the customer to own their own home as protection or mortgage. Repayments are calculated depending on the amount of money required and the length of time the loan would be required for. For example, the longer the loan is borrowed for the smaller the payments are, but the more interest the customer will pay. It is therefore essential, as the home is used as a guarantee, that the borrower is certain that the repayments can be met before an agreement is made.

Some lenders may consider one's credit rating through agencies before sanctioning a personal loan but that in most cases is a formality. Do not forget that they are there to give loan to people with bad credits only.

However, if one has a very bad and unimpressive record in the past, he may be refused but that happens in only exceptional cases and surely, he can get his loan from some other lender. Rate of interests in bad credit personal loans may be high at times because they are being given to someone with a credit history. That is the only disadvantage of otherwise a life-saving loan for many.

On the whole, bad credit personal loan is a boon in disguise for people with bad credit and may do wonders for them by rejuvenating their businesses or consolidating debts.

About the Author
A boat Loan runs an informative website that looks into all aspects of Loans from bad credit to those in need of there first loan. To find out more visit
Bad Credit

Debt Consolidation