Tag Archive | "Mortgages"

How to qualify for mortgage with Bad Credit history?


How to qualify for mortgage with Bad Credit history?

How to qualify for mortgage with Bad Credit history?

According to real estate experts and performance reports, Abu Dhabi property market is showing the signs of recovery. Savvy investors and buyers are flying back to set up their businesses and buying properties over there. Albeit the prices are not back to pre-crisis level but it is not easy for everyone to buy properties on their own. Real estate loan and mortgage is the only option that can help such people to buy properties. This becomes especially hard if you have bad credit history.

People applying for mortgage with bad credit scores remain uncertain about the approval or disapproval of their loan application. Almost every applicant with bad credit history feels the same. Even in this desperate situation, there are reasons to cheer up and apply for mortgage loans confidently. Certain factors are involved that can make the task of securing loan easy so that one can invest in Abu Dhabi properties. Let’s review some of these factors:

Reliable Employment is appealing to lenders

Income is certainly an important factor for the lender before giving you a loan but regardless of how much you earn, reliability of employment is more important for lenders, especially for those with bad credit. Therefore, before applying for mortgage with bad credit, make sure you can prove the reliability of your employment. It is because the lender wants the borrower to repay the mortgage amount without any snag.

For instance, the applicants who have recently started a job, get little preference, even if they earn better those who have been working in the same place for months or years. The lender usually demands a letter of assurance from the employer as a proof of long-term employment.

Improvement in credit score is significant for lender

The credit score may not matter a lot for people who are regularly repaying their loan but it says a lot about the loan applicant who has applied for mortgage despite having bad credit score. People making efforts to improve their credit score are highly valuable as it indicates that situation that contributed to a bad credit score can get better. If you want to secure approval for mortgage despite having bad credit scores then you must take some proactive steps that can improve your credit score.

For instance, to return the old loan before applying for mortgage, you can take a personal loan to repay quickly and improve the credit score, instantly. These efforts show that you are ready to take mortgage and committed to repay it without skipping any repayment.

Hefty Down Payment is impressive for lender

Out of all practical and positive steps that an applicant with bad credit score can take, the most important one is to make a hefty down payment. It is the most impressive thing for a lender from a borrower’s side. The huge down payment means that the mortgage amount will be automatically reduced. It also means that lesser risk is involved from lenders’ side regarding their money.

The other aspect of hefty down payment is that lenders can trust the borrower for their money. Now it is up to you how you can take proactive steps to negate the impact of bad credit scores on your application.

 

How to qualify for mortgage with Bad Credit history?

 

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Choosing between Fixed or Variable Rate Mortgages in the Current Climate


Choosing between Fixed or Variable Rate Mortgages in the Current Climate

 

Fixed or Variable Rate Mortgages in the Current Climate

With recent cuts to the basic rate for lending and more cuts expected in the coming months, many people are questioning which kind of mortgage they should take out – variable or fixed rate mortgages. The looming uncertainty over the housing market has caused many people to become somewhat reluctant to purchase houses and the national house price average has fallen over 6%, in many areas, over the last year. In recent news, mortgage providers have been lowering interest rates in order to attract more customers; despite record high numbers of people being denied mortgages. Credit has undoubtedly become more expensive for providers and there is an air of stringency over much of the market. However, it has recently emerged that more people are choosing fixed rate mortgages over standard rate ones and we thought it was worth analysing the difference for people looking to purchase.

 

The current situation is not tenable in the long run and in many parts of the country those prices are tentatively starting to show signs of recovery. The high cost of rentals and the increasing property investment market mean that, by the end of the year, it is likely we will be seeing sustainable growth within the market – meaning, of course, that now is a good time to buy.  Of course, there will always be exceptions to any prediction or to any systems. When you’re looking at purchasing a home and mortgage policies you will want to compare prices and rats while trying to predict future rates to an extent, and while many providers will only list a few sources, you can run a comprehensive comparison on Bankwest.com (http://www.bankwest.com.au/personal/home-loans/home-loans-overview), which provide a wealth of material on understanding interest rates and policies.

 

Recently, The Australian reported that customers are choosing fixed rate mortgages over flexible. This is largely due to the uncertainty surrounding interest rates and the future of the housing markets. However, the grounds for many people’s decisions is that thee basis point rates on fixed rate mortgages are currently a lot better than those available on variable rate mortgages. From the lenders perspective they have been able to offer better fixed rate deals because the types of debt and credit used to finance these policies are cheaper than the short term debt used to determine flexible rate mortgages. This is an interesting situation as at the start of the recession many individuals suffered incredibly when rates rose sharply when the recession hit. Our uncertainty over the future of the market has meant that more people are using fixed rate mortgages.

 

Fixed or Variable Rate Mortgages in the Current Climate

Fixed or Variable Rate Mortgages in the Current Climate

However, if we analyse this further, we can actually see that in our present situation fixed rate mortgages are actually offering a very secure property investment. With rates cut recently and prices showing tentative signs of recovery locking in a low interest fixed rate mortgage at this stage seems a viable option and one that is likely to help secure you a better deal. Of course we can’t predict totally how the market will go or if we will see quick recovery in the coming year but we can remain optimistic.  However, the situation with credit more generally doesn’t look to be recovering as quickly as many would hope. The costs of short term borrowing are still very high and new lines of credit are much more expensive than they were prior to the recession. This means that at least for the foreseeable future a fixed interest rate mortgage is likely to remain a more secure and valuable investment option than its alternatives.

 

Choosing between Fixed or Variable Rate Mortgages in the Current Climate

Posted in LoansComments Off on Choosing between Fixed or Variable Rate Mortgages in the Current Climate


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