Finances

Many Homeowners are not aware of all the options that are available to them when it comes to Home Loans. As a Home Remodeling Specialist you have a very powerful sales tool that most of your competitors don’t even know exists. By using this Sales tool you can overcame the one Major purchase objection and Close up to 200% More Sales.

One of the biggest objections you will get from your customers when you try top sell them that Remodel, wether it be a Kitchen Remodel, A Room Addition, A Deck, a Fence, A Pool or a Hot tub is I can’t afford it. I would love to do it but I just can’t afford it. Some Sales Trainers will tell to reply with something like, Lets suppose that you could afford it would you buy that New Room Addition, Kitchen Re-Model, New roof etc.? Most would say sure But I just can’t afford it.

The Trial Close
Now You have them. You reply to them if I could show you a way to get that Remodel that you really want, put some cash in your pocket with the same or lower monthly payments would you be interested?

For many seniors in or entering retirement, the prospect of purchasing long-term care, investments or annuities can be cut short by a lack of retirement income. Statistics show that 3 out 4 seniors will have to lower their current standard of living during retirement. Social Security, IRA’s, 401k’s, and other methods of retirement income usually provide enough income for living expenses and recreational activities, but do not leave much room to improve your financial future. A Reverse Mortgage is an increasingly popular solution for increasing income, and large amount of tax-free funds to safely move into investments and securities.

Reverse Mortgages are Federally regulated and guaranteed financial vehicles that allow a senior, age 62 or above, to extract a large amount of the equity locked in most senior’s largest illiquid asset: the home. A Reverse Mortgage will provide a percentage of the home’s appraised value, usually 20-60%, in a variety of different payout methods, but the senior is never required to make a payment on the loan for as long as they live in the home. All repayment, closing cost, and interest are repaid when the senior moves or the home is sold, so it produces a large amount of capital with absolutely no risk of default or foreclosure on the home. “There a is Reverse Mortgage myth that the bank can take your home, that is totally false” says Troy Shellhammer of Reverse Mortgage Nation.

Today’s real estate market is a volatile one; prices are at record levels and Interest rates are favorable, but foreclosures are increasing. Wages haven’t kept up with home prices and some buyers who had to stretch to find a way to obtain a mortgage in the first place are having trouble making their payments. Usually, if a buyer cannot meet his or her mortgage obligation, the lender forecloses, taking the home and leaving the buyer without a place to live and a tarnished credit record. If you are having problems paying your mortgage, can you avoid this scenario?

Depending on your type of mortgage and your lender, you may have other options. Most lenders, wary of rising foreclosure rates, would rather work out some sort of solution than take your home. Lenders are in the business of lending money, not selling houses, and the process of foreclosure is a tedious one that most institutions would rather avoid. The first thing you should do if you find yourself with a problem making your payments is to call your lender and discuss the matter with them. The sooner you contact them, the more likely you are to work out a solution that’s agreeable to both of you.

Home loans for people with poor credit demand that you understand the requirements for a subprime mortgage loan to get the best rates and terms. By satisfying the requirements, you can be assured of securing a subprime mortgage to buy a home.

Time To Rebuild Credit

Depending on subprime mortgage lenders, you can be approved for a mortgage loan after two to three years of a foreclosure or bankruptcy. Within those three years, by making regular payments, you can end up having a good credit score.

If you simply have a poor credit score due to late payments, you will probably still qualify for a subprime mortgage. However, the longer period you have of on time payments, the better your score and rates will be.

Down Payments

Down payments reduce the risk for mortgage lenders. So with a FICO score of 600, you could apply for a zero down mortgage. A FICO score of 585 or higher will require at least 5% down.

Debt To Income Ratio

Before you apply for a hard money loan, try applying with a subprime mortgage lender first for lower rates and fees. Hard money lenders charge excessive fees to high-risk borrowers, but will only lend 50% to 75% of the value of the property. On the other hand, subprime lenders offer loans to similar high-risk groups, but with better terms.

Lower Rates

Subprime lenders specialize in B, C, and D class loans. Even with a bankruptcy in your financial records, you can still be approved for a mortgage with a subprime lender. To protect themselves from the higher risk of foreclosure, subprime lenders charge a couple of interest rates higher with additional fees.

Hard money loans are funded by private individuals, who require high interest rates somewhere between 12% to 18%. This is nearly double what a reputable subprime lender would typically charge. You can also expect to pay higher fees upfront with hard money lenders.

Reasonable Terms

Subprime lenders offer mortgage loans similar to that of traditional mortgage lenders. You can expect regular payments and terms, such as no early payment fees. Subprime lenders also require smaller down payments, even zero down if you have a FICO score of 600.

Dealing with mortgage companies online can enable you to get a home loan even with bad credit. Bank associates’ skepticism and talk around are avoided when you apply online with a mortgage broker. You also can compare multiple financing offers to ensure you are not getting scammed just because you have poor credit.

To get the most out of your online mortgage company, follow these tips:

1. Learn About The Loan Process

Don’t be a victim to predatory lenders. Educate yourself about the loan process by reading articles on mortgage brokers’ websites. You will quickly find out what fees and interest rates you can expect to pay for a sub prime loan, as well as the type of financing that will best meet your needs.

2. Apply For Quotes

There are two types of mortgage quotes that you can find online. One is a generic estimate based on limited information such as your estimated income and monthly bills. This is similar to the quotes posted at the front of a bank. They are a fast way to compare mortgage lenders, but not a quote you can rely on.

Imagine an adjustable rate mortgage that allows you to pick one of four payment options on your monthly mortgage bill. It is an ARM on which the interest rate adjusts monthly and the payment adjusts annually, with borrowers offered options on how large a payment they will make. The options include interest-only, and a “minimum” payment that may be less than the interest-only payment. The minimum payment option results in a growing loan balance, termed “negative amortization”.

How Will I Know an Option ARM When I See One?

Ask the loan officer if the mortgage has more than oe payment option. Does the rate adjusts monthly, and if negative amortization is allowed. If the answer to both questions is “yes”, you almost certainly have an Option ARM. Their names are all over the map and include “1 Month Option Arm”, “12 MTA Pay Option ARM,” “Pick a Payment Loan”, “1-Month MTA”, “Cash Flow Option Loan”, and “Pay Option ARM”.

What Are the Advantages of an Option ARM?

Like a big brother keeping notes of the erring behaviour of his younger sibling, credit reference agencies like Experian and Equifax maintain a record of each person entering into credit transaction. While a few instances of arrears are considered admissible, as the incidence of bad credit behaviour increases, creditors start considering these as a lack of reliability. These people are termed as having a bad credit history.

Of all things, the ability to get a reasonable term mortgage is particularly affected by a bad credit history. Opinions differ on the extent up to which credit report must be allowed say in deciding the candidature of borrowers for mortgage. The first group says that a borrower with a bad credit history cannot be relied to repay the mortgage lent on the basis of their past records. Thus, it will be wise to refuse mortgages to such borrowers.

The other group of lenders believe that taking a moderate degree of risk while dealing with bad credit borrowers will do little damage. Their contention is that poor credit mortgages (a mortgage offered to borrowers who have a bad credit history) are secured with a sufficient guarantee or collateral in home, which may be used if any amount remains unpaid on the mortgage. Thus, there is little to lose by offering Poor credit mortgage.

Mortgage underwriters can be a suspicious bunch. If you have bruised or even bad credit, you have your work cut out for you. Many loan programs have guidelines that set a minimum FICO score of 620. FHA does not allow lenders to reject a loan based solely on FICO scores, but if yours is less than 620, there are probably other reasons the underwriter will find in your file to say no.

When applying for a mortgage loan when you have a bad credit history. There are a few things you should know about your FICO score that will help you know what to expect from mortgage lenders.

With a credit score below 585, you will need to put at least 10-20% as a down payment on the property. You will not likely be approved for 100% financing at this point.

If you have a credit score of between 585-599, you will probably need around a 5% down payment in order to get an approval for a home mortgage loan. You will still need to get your approval from a subprime mortgage lender. You will need to use a lender who specializes in loans for people with “less than perfect credit” or situations that make it difficult for a person to get financing for their home.

If you have a credit score of 600 - 620, , you will probably be able to get an approval for 100% financing. You will also, in this situation, still need to use a subprime lender.