Important Facts You Should Know When You Refinance a Bad Credit Home Loan

If you are currently making payments on a home loan that was executed under the onus of bad credit scores; it probably has pretty high interest rates and unwieldy monthly payments. You may want to consider getting a bad credit home loan refinance.

Hard Times Make Traditional Lenders Shy

Because of these economically unstable times, many people have taken hits on their credit scores. The instability caused by the housing loan debacle of the last decade made lenders raise their standards, not only for home loans but also just about any loan. So it is somewhat difficult to wrest a home loan refinance from them if you have a smudged financial history. However, if you have been a client at a traditional lender and have a good history with them you probably should approach them. They will be able to offer the lowest rates available.

Private Lenders Step In

With traditional lenders not lending to bad credit borrowers and with so many bad credit borrowers in need of refinancing, private companies have recognized a growing (and profitable) market and have stepped in to offer bad credit home loan refinancing.

Gather Your Documents

Before you go shopping for a bad credit home loan refinance, you should have your documentation. You will need two forms of government issued identification, proof of job stability and salary, access to an active bank account (usually checking with direct deposit), proof of residency and other home buyer documents.

Figure Your Budget

You need to establish your financial goals for short term and long term. You want to figure what interest rate you would like to find, and establish what you would like to pay every month. You will also want to figure when you would like to be out from under any type of mortgage. If you go online, you can find free mortgage and mortgage refinance calculators that will help you figure interest rates and repayment schedules. You should also pull your credit ratings so you know how you look to prospective lenders. Also, check and correct any discrepancies.

Start Your Search

Once you have gathered your documents and figured your finances, you will start hunting for a lender who will offer you good interest rates and comfortable payments for a bad credit home loan refinance. While you may want to check locally with banks and credit unions as well as store-front lenders, your best bet would be to check out refinance companies who have set up shop online.

Online Lenders

Fire up your computer, get on the net, and punch your browser with bad credit home loan refinance. You will rewarded with scores of lenders that may be willing to work with you. You will also find brokers who will take your general financial information and will return a list of lenders who would most probably lend to you in light of the information you have given. As with any online application, you should be sure the websites where you divulge personal and financial information is secure. You will want to check the credentials of any lender you may choose for your bad credit home loan refinance.

Buyer Beware

You can check on the reputation of lenders by checking the online listings of the Better Business Bureau (BBB). The BBB will have assigned grades to each lender and at times you will even find customer feedback. You will want to gather a list of at least 10 lenders. Getting quotes from each. Let each lender know that you are getting quotes from other lenders. You should be able to pick and choose to get the best deal. Also, be sure to read the fine print before you sign anything. With a little research and diligent shopping, you will soon be making home loan payments that are easy to handle and have a good interest rate.

FHA Loans Information – What is a FHA Home Loan?

If you consider yourself a prospective home buyer, there is a lot of information you need to be aware of. As for new home buyers who are applying for an FHA loan, making your self updated with the proceeding rules and regulations of the FHA would make it easier for you to meet their qualifications.

You can start off in checking your qualification list by updating all of your paperwork which means preparing your most recent paperwork. You need to present addresses where you have lived in past 2 years. The same goes with your employment and income information. You also need to track those open loans you have, your bank accounts, information regarding any other real estate you own, your most recent W2 and tax returns. In addition for those veterans, your certificate of eligibility and DD Form 214 which is otherwise known as your discharge papers should be included in your paperwork list.

In order for you to qualify for an FHA home loan, you should have at least two years steady employment, ideally in the same field. Income should be steady or increasing. Mortgage payments should be 30% or less of your income. The total finance payments including new home, auto payments, credit cards and other monthly accounts should not be exceeding 41%. As much as possible, you may have one federally insured loan open at a time.

In addition to this FHA mortgage information, if you have had bankruptcy, it must be at least two years old with good credit established after the bankruptcy. The same goes with foreclosures, it must be at least three years prior.

As for FHA home loans information on benefits, FHA loans include low down payment, basically runs 3% and sometimes lesser. The interest rate is often lower than other types of loans. It not essential to have a perfect credit rating to qualify for an FHA loan, which is basically the reason why first time home buyers chose the FHA loans.

It is advisable for you to seek FHA approved lender in order for you to gather more FHA loans information. At the same, you get to ask more questions that seem vague to you. More FHA loans information are provided by these approved lender. Keep in mind that there are differences and loan limits in FHA loans, which is why you need to probe for more FHA mortgage information, particularly on location as the loan limits differ per region.

5 Benefits of the FHA Home Loan Program You Need to Know!

You will find many home loan programs available to finance your new home purchase. You need to research the different programs available and choose the one that best fits your needs. One of the best ones available is the FHA Home Loan Program.

Although the FHA Home Loan Program was designed for first time home buyers, anyone may apply for the program. Not only can a FHA Mortgage Loan be used to finance the purchase of a new primary residence but also you can use it to refinance your existing home mortgage loan.

There are many benefits to the FHA Home Loan Program.

1. Low Down Payment Requirement

A FHA home mortgage loan has a lower down payment than a conventional loan.

The down payment requirement currently is as low as 3.5% of the purchase price. And here is some more good news, the down payment funds can come from many different sources such as a gift from a member of your family, your church, or a withdrawal from your 401K. It could, of course, come from your own savings.

Because you can get the down payment funds from many different sources, it will make it a lot easier to purchase your home.

2. Seller Can Help Pay Your Closing Costs

The FHA Home Loan Program will allow the Seller to contribute up to 3% towards to your closing costs on your new home.

This will allow you to purchase a new home without any funds if you can get a gift from a family member for the down payment and ask the Seller to pay up to 3% of the closing costs. The closing costs that the Seller can pay include also the “prepaids” such as property taxes, home insurance, and interest.

3. The Interest Rates Are Low

The FHA mortgage interest rates are very competitive if not lower than most other home loan rates. Although in today’s mortgage market you will need around 620 credit score to get a FHA Mortgage Loan, the FHA interest rate is not tied to your credit scores.

If your credit score is 620 and another person’s credit score is 750 you both will get the same interest rate. On a conventional home loan, the person with the higher credit score would get lower interest rate.

4. No Limits On The Amount Of The Mortgage

There are not limits on the amount of FHA home loans, but there are limits on the property values you can purchase with a FHA loan. The limits on the property values are different throughout the country and you should check with a Realtor or lender in your area.

5. You Can Refinance With A FHA Streamline Mortgage Refinance Loan

If you already have a FHA mortgage loan one of the great benefits is you can refinance using a FHA Streamline Mortgage Refinance Loan.

This type of refinancing loan is when you already have an existing FHA mortgage and you want to refinance it into a new FHA mortgage. You can do this without limited paperwork and a lot less cost.

The FHA Home Loan Program is a great way to purchase your new home with a low down payment, low interest rate, and the opportunity to refinance it with limited paperwork and cost. The best place to get additional information is the Internet. You will find many websites with FHA Loans Information that will help you with the financing of your new home!