Obama's Home Refinance Stimulus Plan to Save Your Home

We simply cannot turn on the television news without hearing about another company closing their doors. Talk to your neighbors, odds are good that they have either been laid off, had their hours cut, or maybe had benefits taken away. Take a walk down a busy street, you have probably bumped into a handful of people that are about to lose their homes. Each of us has been hit hard with all of the cuts being made during this economic crisis. Perhaps you are one of those handfuls on that busy street, about to lose your home. Maybe you now owe more than the house is worth, or maybe you just cannot make that monthly mortgage payment with that unemployment check. President Obama has two new ideas to help you save your home with his home refinance stimulus package.

The first option is the "Home Affordable Refinance" plan. This part of Obama's home stimulus package requires that you are current on your mortgage. Basically, this plan will lower your interest rates which in turn will lower your monthly payment. The principle owed will not change, just the interest rate. The equity you already have in your home will also continue to increase under this home stimulus plan. If you are current on your payments and the home is your primary residence, you have until June 10, 2010 to apply for this "Home Affordable Refinance" plan.

The second option under Obama's home stimulus package is the "Home Affordable Modification" plan. In order to qualify for this home loan modification, your primary residence housing expenses must be more than 31% of your total gross income. If you lost your job or had a major medical expense and can no longer afford your mortgage payments you should talk to your bank regarding this home loan modification process. The Treasury Department is willing to help with this home stimulus plan as well. Each month that you make your mortgage payment on time, they may make a payment that will apply directly to your principle. If you qualify for this part of Obama's stimulus plan, over a 5 year span the Treasury may pay as much as $5,000.00. You have until December 31, 2010 to talk to your bank about this loan modification help. The federal government is trying to save our homes!

by Scott A. Kennedy

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Know how to get Easy Home Loans

In today's competitive world it is not a tough task to get home loans as there are many banks and independent financial institution who are offering this service to the consumers. Whether you are looking for a mortgage loan or a home equity loan the availability of these loans is in vogue.

These loans are easy to get and also very flexible and tenable. It is perfect for the homeowners especially as it is much uncomplicated. These investment loans are easy available as it is offered by almost all financial institutions and banks. Most of the people who are planning to buy a home depend on the availability of these loans to fulfill their dreams.

There are very few people who have enough bank balance or other saleable property to be able to invest anywhere else. And even those who are financially strong enough to buy a property on their own rather find it beneficial to borrow money from the banks in the form of investment loan as they manage to save tax in doing so. The money that these home owners borrow from the financial institutions is what is called a mortgage and it is secured on the real estate by the "lien". Everyone dream of having their own house. And especially people from the middle class consider it to be a big achievement as it is a very considerable investment that one has to make. This is where the banks play a very key role in fulfilling their dreams. The home equity loan that these banks offer and the services that come along with it are very beneficial to the consumers.

Thus before taking a loan it is very important to understand the terms and conditions of the bank and the policy and the procedure so that you do not end up paying more to the bank then you should. When taking loan the consumer has to mortgage a security document which will allow him to keep the property title while he can use the property as a security against the loan. The money lending institution in turn puts a lien to the property in the event of the consumer does not repay the loan amount.

Once the loan is repaid the lien on the property is taken back or removed. The home loan borrowers need to remember that mortgage points are of two different kinds. The origination point and the discount point. The charge of these mortgage points may differ with every lender. The discount point is used to get the loan at a desired interest rate wherein a certain amount is paid to the lender.

The origination point on the other hand is paid to the lender to get loan in the first place. The origination point is less popular in comparison to the discount point as it offers the consumers with no benefit and is also not tax deductible. Hence when looking for home loans it is advisable to get it form the lenders who do not charge these points.

by Jessisa Thomson

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Obama's Home Loan Modification Plan - Helping Out Homeowners Across the Country

Homeowners are facing the worst crisis due to the present recession and the economic crisis. Due to the ever increasing foreclosures, house prices are at an all time low. This is because of the depressed sentiment that even one foreclosed home can create in its neighbourhood. This has caused the peculiar situation that many homeowners are saddled with their home that is worth less than their liabilities on account of its purchase. President Obama, having realised the predicament of the homeowners has now introduced the home loan modification plan to solve these problems.

The plan had a quick start in March, 2009 after being announced just a month before, that is, February, 2009. A part of the plan provides for refinance to the homeowners who are at risk of foreclosure. Traditionally, one is asked to at least invest 20% equity in order to be eligible for refinancing. But the fall in prices have robbed the homeowners of their wealth who no longer can afford such investments. Considering this fact, Obama's plan provides for easier terms for refinancing to enable the homeowners to better manage their payment of monthly instalments and thus avoid foreclosures.

About 5 million homeowners are likely to be benefitted by the plan, which offers ways and means of modifying the mortgage loans. The Government will compensate the mortgage lenders who will work with the distressed homeowners by restructuring their monthly payments at lower levels.

The lenders would be made to reduce the interest rates so that the monthly payments of the homeowners using the loan modification plan will not be more than 38% of their gross monthly income. There are still more possibilities to further reduce the interest rates to make the monthly payments to 31% of the monthly income. For this the lenders can get matching dollar amounts from the Homeowner Stability Initiative of the Government. Considering that the present layoffs have considerably reduced the monthly incomes of the people, often a homeowner may have to part with 40 to 50% of their incomes towards mortgage payments, loan modification plan has become has become an absolute necessity to provide relief to them.

The lending institutions are required to complete a series of steps, as laid out by the U.S. Treasury while providing relief to the homeowners through loan modification. These guidelines would help to make the process more efficient compared to the past initiatives of same nature. What happened in the past was to provide loan modification by linking missed payments with the principal amount. However such an attempt failed to reduce the monthly payments. Now Obama's plan strikes the right chord with the people as they would be required to pay lesser bills and thus have the real solace.

by Lindsy Emery

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Buying A Home With Bad Credit

The market is still good for people to buy homes if they have bad credit. At one point in time, having bad credit made it extremely difficult to get a home loan. Fortunately, things have changed, and many people with less than perfect credit are obtaining home loans with decent rates. Getting a home loan with bad credit is doable. However, you must be willing to seek out lenders that offer bad credit loans.

Reasons to Consider Purchasing a New Home

Homeownership is beneficial for several reasons. Individuals who rent their homes or apartments are literally throwing away money. If your rent is $500 a month, in a year's time you would have spent $6000. Instead of making your landlord rich, this money could go towards paying a mortgage and building equity.

Furthermore, if you own a home, you are eligible for certain tax deductions. Owning a home also makes it possible to get extra cash by tapping into your home's equity. Home equity loans and lines of credit are perfect for home improvements, unexpected expenses, debt consolidation, etc.

Choosing a Lender for a Bad Credit Mortgage

Be aware that not all lenders will offer loans to people with bad credit. Although many mortgage companies have started offering sub prime mortgage loans, some lenders will not approve an application if your credit score falls short of their minimum requirements.

Because credit blemishes are common, and the average household carries a large credit card balance, many lenders have begun offering loan programs for all credit types. These loans also benefit those unable to save for a down payment or closing fees.

Tips for Getting Approved for a Bad Credit Mortgage

If you are hoping to get approved for a home loan with bad credit, you may qualify for a better rate if you fix credit problems beforehand. Improving your score by as little as ten points may make you eligible for a slightly lower rate.

Additionally, get multiple quotes by using a mortgage broker. Brokers can help you locate many sub prime lenders that offer bad credit mortgages. When completing a quote request, choose a broker that does not review credit. If your credit is evaluated by four different lenders, it may decrease your score.

Instead, provide an accurate credit description. It may help to check your personal credit report before applying. Once you obtain at least four offers from different mortgage lenders, compare the quotes, and pick a lender. Complete the loan process by submitting an official loan application. The chosen lender will check your credit before finalizing the loan.

by Reginald Ross

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Mobile Home Loan Refinancing is Different

With a mobile home you can literally put wheels on the structure and drive away with it, and this increases the risk of the loan compared to a home on a foundation. This is exactly why many traditional mortgage lenders and brokers don't want to work on mobile home loans. Another issue with mobile home loans is that they are considered personal property, not real estate. Therefore, financing a mobile home loan without the land beneath it is similar to purchasing a car or RV.

Mobile homes are manufactured off site, so they are not the same as a standard stick-built home. The laws concerning the financing for mobile home loans vary from state to state, so it is very important to make sure the lender or mortgage broker is compliant with your state laws, and is licensed to lend the funds to finance or refinance a mobile home loan, known as a chattel mortgage. Knowledgeable lenders that have experience in Manufactured Home Loans will be able to answer questions in regards to the laws and regulations in a specific state. The costs associated with refinancing your home mortgage should be similar to the fees that are paid when financing a mobile home purchase.

Most lenders who specialize in Mobile home loans treat them similar to conventionally built homes and will consider refinancing a loan for mobile homeowners who already have built equity. Why would someone consider refinancing their home? There are some really good reasons to refinance a mobile home; lowering the current mortgage interest rate and monthly mortgage payment, paying for children's college tuition, paying off high interest credit cards and auto loans, or making improvements to maintain the value of the home.

Refinancing a manufactured home is essentially getting a new loan with better terms to pay off a current loan, and it usually has one of many benefits. If you are currently in a situation where you can afford your monthly payments, then refinancing your mobile home with a lower interest rate could allow you to pay off your loan sooner, shorten the length of your loan, or easily make additional principal payments towards the principal balance of your loan from time to time. Financing for manufactured homes and mobile homes is available for mobile homes in space rent parks, parks where you own your own lot, co-op parks, and mobile homes or manufactured homes located on privately owned land.

Some lenders like California Manufactured Home Finance, offer a low, flat rate fee, if you are looking to refinance with the lowest fees possible. Most borrowers have the option to go ahead and pay the fee(s) up front, however you can also include the fees into the new loan amount and keep out of pocket expenses as low as possible. Just like a traditional home loan, borrowers can also buy down their interest rate. To do this, borrowers must be charged with points. Points are additional fees that are paid at the time of closing to the lender that is financing your new loan. Usually a point is considered one percent of the new loan amount.

by John Cain

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Home equity loan

In simple terminology, a home equity loan is a loan taken against your house. A home equity loan is also called a mortgage or a second mortgage. Another synonym for home equity loan is equity release schemes.

While taking a home equity loan you are actually borrowing the worth of your house. If the house is completely owned by you, then the term used for home equity loan is "mortgage", otherwise if your house is not fully paid off but has equity, it is called a "second mortgage". From now on we will use one term for both to facilitate better understanding. We will call them Home Equity Loans.

A home equity loan is an extra loan that you take against your home in addition to your mortgage; hence this is called a second mortgage. This enables a home owner to encash equity without refinancing the first mortgage. Most people are under the impression that the only way to raise cash is by selling their homes. However reality differs and factually one can take a second mortgage to free up the first mortgage also.

Equity is the difference between the amount you owe on your current home mortgage and the current value of your home. Furthering this definition, suppose you sell your home, the amount of cash left in your pocket after paying off the mortgage is called Equity. This equity when taken as a loan from a lender, without actually selling your home comes to be known as home equity loan. Many lenders or loan companies allow you to borrow bigger amounts calculated by subtracting the balances of outstanding mortgages from 125% of the market value of your home. However the actual equity is the difference between appraised worth of your home and the balances of your outstanding mortgages. There is no bar on how you can use the home equity loan. You can use it for any purposes as it suits you.

A home equity loan is usually a one-time fixed interest rate loan, which is paid out at one go. The rates of interest or the cost of the loan will depend on options you choose viz. the term of the loan and the amount; of course another important factor has always been your credit rating. The longer the term of the loan, the more you pay out as interest, also if the amount is more, the more interest you pay. As always with any liabilities one undertakes certain words of caution are advised. Check all your options thoroughly before making a decision. Choose the amount carefully and take only what you need and specify the term which you think would be comfortable for you to repay in. No point accumulating liabilities in exchange for spending on pleasures or acquiring unnecessary assets. Home equity loans are easily accessible to people with poor or bad credit rating since the lender is taking a lesser risk as the loan is secured against their home.

A Home Equity Loan usually means that you get the best interest rates on the loan, i.e. you get the loan at a lesser cost compared to other loans because of assured security, but one should always remember that the house is at risk lest you fail to repay the Home Equity Loan.

by Otello Zorina

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Why Are So Many Home Owners Taking Advantage?

To define a few terms, equity is the difference between your home's appraised - or fair market - value and your outstanding mortgage balance. A loan refers to the amount of money you borrowed from a lender providing you with the mortgage. So basically, the idea with home equity loans is to borrow against your home's equity as a very effective way to get some things you need at a good price.

Homeowners, mostly the elderly, and people with low incomes or with poor credit must be very careful and wary when borrowing or having a loan based on their home equity. This is because there are some lenders who target these borrowers and exploit those who innocently may be placing their house at great risk. Take note of this factor and be sure to educate yourself about home equity loans.

Why Have Home Equity Loans Become So Popular?

Borrowing against the value of a home has become increasingly popular. There are two key reasons for this surge. People are taking advantage of low interest rates and tax deductibility.

The tax changes that occurred in 1986 have eliminated deductions for most consumer purchases. As a way to get around these changes in tax, consumers began borrowing up on their home value in order to make purchases. Home equity loans thus became a method adopted by homeowners to buy goods and still get a deduction.

Here is an example of how home equity loans are being used today.

Let's say that you bought your home for $95,000 and made a 20 percent down payment of $19,000. To pay the remaining $76,000, you then took a first mortgage. On the day you closed on your home, you automatically had 20 percent equity. As you pay off the principal, you gain equity and your home grows in value.

Now, let's say that you have paid $12,000 toward the principal and your property. Remember that you property was valued at $95,000 when you bought it. Now, since you have made the payment on your principal, your $95,000-home is now worth $115,000. Your beginning equity ($19,000), plus the principal you have paid ($12,000) and the increase in your property value ($20,000) gives you $51,000 in equity.

Banks and borrowers both benefit from home equity loans. For that reason, interest rates for home equity loans are lower than for other loans.

Like most things, home equity loans also have their downsides. The disadvantage to home equity loans is that if you default on the loan, the lender could foreclose on your home. For this reason, home equity loans are statistically most suited to stable, middle-aged borrowers.

Home Equity Loan - Beware Of Scams

A home equity loan permits one to borrow a certain amount of money, using the equity of your home as collateral.

Homeowners, mostly the elderly, and people with low incomes or with poor credit must be very careful and wary when borrowing or having a loan based on their home equity.

4 Home Equity Loan Factors To Watch Out For

1. Equity stripping. Careful! This home equity loan lender has the possibility of stealing the equity that you have built up.

2. Balloon payment (hidden terms) with home equity loans. Examine meticulously the terms of the loan. Your monthly payments can be lowered, as the lender is offering, that you pay back only the interest. You will be facing foreclosure if you can not pay the principal with this type of home equity loan.

3. Loan Flipping. This is when the lender inspires you to repetitively refinance your loan and to borrow more and more money. A certain lender offers you refinancing, and uses the availability of extra money, declares that it's due time that the equity you built starts "working" well for you. After a few payments, the lender then offers you a larger loan for a family vacation. You accepted the offer and the lender then refinances your original loan and gives you the additional cash.

4. Credit insurance packing. In this case, the lender will add credit insurance to your home equity loan that you do not necessarily need.

by Dean Shainin

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Fund Against Your Home Equity

Bad credit home equity loans refer to a kind of money provision which provides you fund against the equity value of your home without considering that how bad is your credit status. The loans are secured and facilitate you with a number of benefits. If you have your own home then, you can avail these loans.

The loans can be taken to fulfill any of your personal needs like refurbishing your home, paying medical bills wedding, education fee, consolidating you debts and so on. There is no such restriction for use of these loans.

Bad Credit Home Equity Loans are secured loan so even if your credit status is not in sound financial status still you can avail the fund against your home. Besides availing fund, you can also improve your credit status for smooth future lending. Thus the loans give you one extra benefits besides providing you fund. Bad credit home equity loans possess many distinguished features:

* It allows you to avail large sum of money with flexible repayment tenure and low rate of interest. You can avail amount up to £75000 under these loans.

* It offers you to choose the repayment tenure of your choice. However, the normal period ranges from 5 to 25 years.

* Its low rate of interest coupled with long repayment tenures keeps your monthly outflow under control and you pay the installment smoothly.

* You get opportunity to uplift your credit status. As the loans acts also as a financial tool. By making repayment on time, you can improve your credit status which will keep your future lending smooth,

Bad credit home equity loans are available offline as well as online. Before applying, a close familiarity with prevailing trend of financial market is essential. Through online survey, you can get a fair idea of loan market with different competitive loan quote. Comparing them in terms of better deal will lead you to choose the best loan program.

by Johns Tiel

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A Guide for the First time Home Buyers

As a first time home buyer, do know the first thing about the cost of buying a house? Most first time buyers don't. Here are some things to keep in mind when you get ready to make the largest financial decision of your life. A mortgage broker marketing company will be your best bet to get all the information you will need to make the purchase. Use this as general information or your personal mortgage marketing tool.

First of all, consider how much can you afford? A mortgage marketing company will tell you that the average person can afford a house that cost about 3 times their annual income. So with an income of $40,000 a year, a person could afford a house that costs about $120,000.

Wow, where are you going to get $120,000? Don't worry. If you qualify, you will take a loan from a bank to pay for the house. This is called a mortgage. Mortgages can be paid back within years of taking the loan such as 30 years. A mortgage marketing tool, sometimes known as a calculator can calculate the price of a home you can afford. It can also calculate the monthly payments you will make depending on the amount of the loan and the size of your down payment.

Down payment? What's that? A down payment is up front money you will make to the bank that is offering you the loan. The larger your down payment, the lower your monthly payment will be. In general, a bank will want to see at least 3% to 20% of the cost of the house as your down payment.

Now that we have discussed the down payment, let's discuss the closing costs. The closing cost is the is the amount it will cost you to have the keys handed over to you. The cost of paperwork and title transfer make up this up front money. In some cases, the bank will add the closing cost to the loan, which will add to the monthly payment. Generally, up to 8% of the sales price is the amount of the closing cost.

As a first time buyer you will be overwhelmed emotions, good and bad. Find a home that you would like to purchase and contact the mortgage marketing firm selling the property. They will take you through all the steps to get you into your dream house. Remember, this is your first time but a mortgage broker marketing company has sold houses a time or two.

by Caitlina Fuller

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Save your Money with Bank Foreclosure Homes for Sale

Bank foreclosure homes for sale provide excellent opportunities to everyone. Those who want to own a home but have not yet been able to do so owing to financial constraints can expect to strike a beneficial deal with lender foreclosures.

And those who are waiting for good investment opportunities in real estate will also find it to be a lucrative proposition. They can buy bank foreclosure home for sale for a fraction of their market worth in foreclosure auctions and sell them later for a good price, earning great returns in the process.

What are foreclosure homes?

Foreclosure homes refer to the property reclaimed by banks and other lending agencies when the home owners start defaulting on payments. In normal course of event, the bank issues warning and notices to those who have taken loan, to rectify their erratic payment behavior. But, when they are still unable to pay, the banks confiscate the property so that they can sell it in the market to recover their money. As such all foreclosure properties are essentially lender foreclosure.

The concerned lending agency does not have much interest in the foreclosed property. All they want to do is to sell it pronto so that they can recover their tied-up money. Therefore, we normally have auctions for Bank foreclosure homes for sale where the highest bidder gets the ownership title over the property after paying the requisite amount.

Advantage of lender foreclosure properties

- The most obvious advantage is that they are great value for money propositions. Foreclosed property is, often, 20 to 50 percent cheaper than its actual market worth, making it a sound investment.

- It's a win-win situation for concerned parties. The lending agencies recover their lost money and the buyer get sound value for money. The lending agencies cannot recover the property and just sit on them. They will, then, incur great expenses on maintenance, upkeep and utility bills of the property.

- You can also get bank foreclosure listings giving extensive and comprehensive details of the property so that you can circumvent the brokers and directly approach the banks for the deal.

by anirban

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Home equity loan online: entail funds against your home

Sometimes the house we live in can save us from difficult conditions. It is an asset that can be used to generate money to solve financial problem that may arise. Home equity loans online are suitable option to get funds to solve financial emergency.

Home Equity Loan Online is a secured loan that requires a borrower to pledge equity of his home as collateral. The presence of collateral enables borrower to avail the loan at lower interest rates.

Borrower can use the loan amount for any purpose like:

• Home renovation

• Buying car

• Debt consolidation

• Paying off outstanding bills

• Electricity or utility bills

• College fee

The loan amount that a borrower is offered is determined by the existing equity in the home. It is calculated by subtracting all the outstanding debts from present market value of the house. A loan amount equal to or lower than equity in your home is offered. The repayment period of the loan ranges from 5 to 25 years.

Home equity loans online are available are of two types: closed end and open end equity loan online. In close end loan you can borrow money in one lump sum amount at once and cannot borrow anything further. In open end you can borrow an agreed sum of money whenever you need. One can opt for flexible or fixed interest rate suiting his conditions. The process of home equity loan online is comparatively longer than the other loans as the lender evaluates the collateral and verifies the documents before sanctioning the loan. Using internet you can view different quotes by many lenders and apply for one with lower rates and best terms that suits your needs.

Home equity loans online can be applied by bad creditors also. Those suffering from CCJs, IVA, arrears, late payments, bankruptcy and defaults can easily apply. Make sure you repay the loan on time as the timely and regular payments will slowly improve your credit scores.

Home equity loans online is a strong financial tool that can solve any financial mess that you might find difficult to handle. The loan is approved on time before the purpose of taking loan gets diluted.

by Dina Wilson

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Why a home equity loan could be your answer to debt consolidation

Consolidation is now a possibility

With rising default rates and delinquencies, most people today are finding it increasingly difficult to manage their finances. From existing loans to credit cards to even medical expenses - the average cost of living seems to have skyrocketed in all quarters. That's where a home equity loan can come to the rescue. Every month the prospect of having to pay multiple bills of varying amounts can be a huge difficulty. Not only is it difficult to keep track of all these bills and expenses, the cumulative costs can work out to be very high. With a home equity loan you can pay just a single bill every month. This will help you plan finances and get you more organized as well.

Reduced interest rates

Most of the time existing credit card debts, loan outstanding amounts and other liabilities can involve huge interest rates and high expenses. A home equity loan can actually provide a reduced interest rate. The best thing is you get the entire loan amount in a lump sum. This helps you pay for any expenses towards your liabilities. You also get some extra cash at hand.

Tax savings

A home equity loan has a tremendous benefit in that it provides for significant tax benefits. You get to deduct your interest amount if you have a home equity loan. This is if the home equity loan is being used for purposes like education, consolidation of debts or even for the improvement of the home etc. You can consult with a tax advisor to check the possibilities.

Customized loan

The best thing about a home equity loan is that you get to choose the type that suits your unique requirements. You can choose a home equity loan with a fixed or adjustable interest rate. The fixed rate will entail a designated monthly payment that does not vary with time. The adjustable rate will vary depending on market conditions. You can also have the option of getting an adjustable rate home equity loan with a rate cap that has been established beforehand.

Free up cash

With a reduced interest rate and longer payment period, a home equity loan can offer significant advantages. For example for starters, it frees up extra cash - so that you can utilize this amount for any home improvement modifications - like maybe doing up the kitchen, or getting new furniture etc. Suddenly getting a home equity loan seems rewarding because now you not only get to pay off all your debts, you also actually get some cash at hand to use for other important things!

by shee

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Bad Credit Home Equity Loans: Fund Against Your Home Equity

Bad credit home equity loans refer to a kind of money provision which provides you fund against the equity value of your home without considering that how bad is your credit status. The loans are secured and facilitate you with a number of benefits. If you have your own home then, you can avail these loans.

The loans can be taken to fulfill any of your personal needs like refurbishing your home, paying medical bills wedding, education fee, consolidating you debts and so on. There is no such restriction for use of these loans.

Bad Credit Home Equity Loans are secured loan so even if your credit status is not in sound financial status still you can avail the fund against your home. Besides availing fund, you can also improve your credit status for smooth future lending. Thus the loans give you one extra benefits besides providing you fund. Bad credit home equity loans possess many distinguished features:

* It allows you to avail large sum of money with flexible repayment tenure and low rate of interest. You can avail amount up to £75000 under these loans.

* It offers you to choose the repayment tenure of your choice. However, the normal period ranges from 5 to 25 years.

* Its low rate of interest coupled with long repayment tenures keeps your monthly outflow under control and you pay the installment smoothly.

* You get opportunity to uplift your credit status. As the loans acts also as a financial tool. By making repayment on time, you can improve your credit status which will keep your future lending smooth,

Bad credit home equity loans are available offline as well as online. Before applying, a close familiarity with prevailing trend of financial market is essential. Through online survey, you can get a fair idea of loan market with different competitive loan quote. Comparing them in terms of better deal will lead you to choose the best loan program.

by Johns Tiel

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Bad Credit Home Loans

There was a time that seems like decades ago when people with less than pristine credit were not able to get home loans. At that time people with bad credit were all but assured that their dreams of homeownership would never come to fruition. Luckily, for many people, those days are long gone.



Homeownership is possible for people with bad credit and no credit history at all thanks in large part to a multitude of loan packages made available by countless lenders. Good people with bad credit can now get approved for mortgages and despite what you may have heard from a well intended but misinformed friend or family members, these loans can be at very competitive rates.



In today's economy if mortgages were made available only to people with pristine credit, the real estate market would collapse. There are simply not enough people in America today with pristine credit. Lenders were forced to create packages available for people with bankruptcies, bad credit histories or no credit histories at all. To remain competitive lenders had to create these packages and you can be the beneficiary of them.



Though it is true that some packages remain available only to those with excellent or very good credit, there are just as many, if not more packages that are made available to people with mediocre or poor credit, including past bankruptcy. These packages are available at all different interest rates and nuances that allow greater flexibility in coming up with a package that makes sense for you.



Lenders are now looking at an overall loan application including income, credit history, appraised value of the home and selling price. They will examine how recent or far back your credit problems occurred. They will consider the instant equity in the home (appraised value versus selling price), as well as your income and ability to pay your monthly payments. When looking at income they can, if you want them to, consider all forms of income.



The more recent the bad credit in your credit reports are the tougher it may be to get approved for some packages, but it is still not impossible. You will want to have a good sense of what is in your credit report so you are prepared to correct any problems in the report. There are countless credit repair programs available that will help you improve your credit score.



Past bankruptcies are not necessarily a death sentence for homeownership and depending on how long ago they occurred they may not hinder the mortgage process at all for you. It is always important to keep copies of your discharge papers and a complete record of your bankruptcy. Your lender may require copies of some of the documentation. They will want to see exactly what was discharged. If there was a mortgage that was discharged in bankruptcy it will impact which mortgage packages are made available to you, but even then there may be mortgage packages that you can still be approved for.



It seems all too often that people with bad credit feel that they are unable to get beyond their past. Owning a home and showing on-time mortgage payments is a good way to improve your overall credit portfolio. If you are approved for a mortgage and show payments being made on time this will go along way towards improving your credit scores and improving your overall financial picture.



When applying for home loans, do not try to hide your credit history, invariably they will uncover any and all skeletons you hoped were in your credit closet. You are much better off being open and honest with your mortgage lender. A good mortgage lender will know exactly what packages they can look into for you if you give them an honest and realistic picture of your credit history and other financial matters. Tell them what is wrong in your credit report and can be fixed, what is accurate and cannot be fixed and what you are unsure about. Some lenders will allow an explanation, including proof, of incorrect items on your credit report and look beyond them while evaluating your loan. Dishonesty, however, can hurt you in the long run so be completely honest with the lending institution.



You can also consider using a co-signer for the loan who has a stronger credit history in some cases. You may be able to have them cosign the loan for a period of time and then you can refinance the loan in your name only once your credit history has been improved. This has become more common with first time homebuyers. The refinance market is strong and there will always be the opportunity to do just that.



The simple fact of the matter is that there are countless loan packages available to people with bad credit or no credit history. These loan packages can help you whether you have a large down payment, a small down payment or no down payment at all. Speaking to a mortgage lender or network of lenders that have many packages at their disposal will help you begin to realize your dreams of homeownership and put you on a path towards a much brighter financial picture.

by Ethan Hunter

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