How to get a mortgage with a bad credit?

Mortgage with a Bad Credit

It is a very common situation now for a person to have a less than perfect credit rating. This could be for something as simple as missing one or two payments to a credit card or something a little more serious such as a CCJ. Most people will believe that that this means that they are not able to get a mortgage, but there may be a mortgage that is available even in these circumstances. Borrowers will need to be prepared to pay a higher rate of interest and put down a larger deposit on the property.

A bad credit mortgage will work in much the same way as a standard mortgage. Some lenders will require a deposit of up to 30% of the purchase price of the property. As with standard mortgages, they fall into different categories such as fixed rate, variable mortgages and discounted rates. The mortgage can help to ‘fix’ the credit rating as making payments regularly and on time will go in the borrower’s favour. Borrowers who qualify can then normally move their mortgage to a standard mortgage and benefit from the lower interest rates.

The first thing any borrower should do before considering a bad credit loan is check their credit file. This is available from any one of a number of credit agencies for a small fee. It will show all borrowing and will also show any default notices, CCJs or other potential problems. When making plans to apply for a bad credit mortgage it is also important to work out just how much it will cost. This should take into consideration any fees or charges as it is very easy to forget about these. When first considering this as a course of action, find out more about costs by using one of the many price comparison sites. Find out more about each company and their loan products before making any applications at all.

It is important to start making sure that all payments are being made on time to other types of credit lenders. Credit card payments being made on time can have a positive effect on a person’s credit file and will be seen in a favorable light by the lender. It is also important to take a look at income. Is the income regular and a reasonable amount? No lender will agree to a loan if the borrower seems to be unable to make the repayments.

The good news is that these loans have become a little more competitive. Terms and rates for these mortgages are becoming more attractive and borrowers will find that they are able to take advantage of tracker mortgages and variable rate options as well as fixed rate loans which offer peace of mind for those worried about potential rate rises.

A bad credit loan may not sound as though it is the most attractive option, but it has the potential to help a borrower purchase a home of their own and will be instrumental in restoring a person’s good credit rating.

Paying for a New Car in Personal Finance in Your 20s and 30s

Ready to own a car in university? Do you want a new one or a used one?
How long would you like to use it? Three or five years?
When you’re ready to buy a new car, you have three methods of paying for it: cash, loan, or lease. The thing is if you pay for a new car in cash you save yourself a lot of money in interest fees, it would be wise however to pay off any outstanding debts on your credit card first. This is to make sure that you will not be overloaded with bills.

These days one can buy a car through paying installments or financing through the bank. However once you miss one payment the car can be repossessed and all that money is lost. These days –after the credit crunch – loans are only given out to people who have Class-A star credit ratings.

Banks Loans
Bank loans are a favorite and as a result they have lowered their interest rates marginally to attract the students. One does have to seriously consider whether or not they will be able to make the payments.
If it is a new car, can you afford the depreciation value of the car? Cars loose the most value within the first three years. Will you trade in to an older or newer car?
It is therefore prudent for a college student to buy an older car and then trade it in for a newer one down the road.

There is also the offer of leasing.
Leasing has two main benefits:

  1. You can drive a newer vehicle that is always under warranty and seldom needs more than routine maintenance.
  2. You can often get a larger, more luxurious, better-equipped car. Auto dealerships prefer leasing because the customer-loyalty rate is three times stronger as it is with buyers.

Things to remember

  • In addition to the monthly payments to make on the car, there is the insurance cover. What kind of insurance cover to take?
  • There is the monthly fuel cost to think about.
  • The cost of regular service to the car.
  • Beware of hidden costs such as ‘balloon loans’. This is a lump sum that is required at the end of the loan period. This is good for the lender but not necessarily the owner of the car.
  • Ask about the title of the car. Who will have this important document?

If it is difficult to get a car loan on your own, you can ask a parent or significant other to cosign on the loan for the car.
Due to many customers defaulting on their car and credit card payments, there have been cases whereby people have been denied mortgage payments.
It is always better to be safe rather than sorry, so it wouldn’t hurt to have the documents that are drawn up given a once over by a lawyer –  there are a lot of unscrupulous dealers out there.