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FAQs – 100% Finance Home Loan and Your Credit Score

What do you mean by 100% Finance Home Loan?

A 100% Finance Home Loan is a mortgage loan that allows you to avoid the hassles of paying for a house down payment. In simple words, a 100% finance home loan is a no deposit mortgage loan.

Who should avail of 100% Finance home loans?

This loan is for anyone who cannot or doesn’t want to prepare the down payment for the home. The usual range for the down payment rate is from five to ten percent of the house value. This is perfect for people with no personal savings, for newly wed couples who are just getting started to build their family, and for people who have a sudden need for a new home.

What are the benefits of getting a 100% Finance Home Loan?

When you opt for a no deposit home loan, all you have to worry about is the amount that will be used for the fees in applying and securing the said loan. You won’t have to wait for months or years in order for you to save some money for the down payment. You can instantly live in your dream house.

Other than that, you can even get mortgage loans that will cover the cost of closing on the property, or those that provide you with extra cash for furnishing the house.

What do you mean by credit score?

A credit score refers to a three-digit number that reflects your credit worthiness. The score is based on your bill-paying history and your debt profile. This helps your lenders determine your credit behavior and your capability to pay the amount you have loaned.

By knowing your credit score, you will have a comprehensive understanding of your credit profile. Note that lending companies use the credit score in determining what interest rate and payment schemes they will offer you. Basically, you ought to have a very high credit score if you are planning to apply for a 100% Finance home loan.

How do you compute for a credit score?

There are specific mathematical models that are used to compute for a credit score. Among the factors that are considered when computing your credit score are your past and present payment behavior, your present debts, how long have you had such debts, the type of credits that are available for you, and the type of credit that you are currently using. The figures generated from these factors are compared with the other payment histories of other borrowers to get your position.

How does getting a 100% Finance Home Loan affect my Credit Score?

When one avails of a no deposit home loan, the borrower is at risk of getting a “negative equity” for the house that he has purchased. This happens if the price of the house that you have bought depreciates. As such, the lending company will ask the borrower for additional charges in order to make up for the current market value of the house.

In cases when the borrower cannot pay for the additional fees, the lender can also sell off the collateral or the securities of the borrower. As a result, the negative equity may lower the credit score of the borrower as well.

Hard Money Loans – And Other Non-Traditional Methods in Obtaining Financing For Your Business

A hard money loan allows the borrower to receive a loan based on the value of real estate he or she owns. The real estate is used as collateral. These loans are issued at a much higher interest rate than conventional loans and are not given by any commercial banks but instead are arranged by private investors.

Since the Hard Money loans are made by private investors a borrower’s credit score is not consider due to the fact that the loan is secured by the value of the property that is being put up as collateral. However, with the current state of the real estate market, hard money loans are not that easy to obtain these days since the real estate market has soften and property is selling for far less than what it was a couple of years ago.

Below are a couple of other non-traditional ways to get financing for your business:

Credit card factoring or Merchant advance for small businesses
Credit card factoring also known as a Merchant advance is when a lender gives your business cash upfront based on your future credit card sales. It is paid back by using a percentage of those future credit card sales until the balance is paid in full. The actual amount that the borrower can receive is based upon the business’s monthly credit card receipts.

General requirements for this type of financing:

o You must have owned the business for at least 6 months
o Your business processes a minimum of $2,000 or more in monthly Credit Card sales
o You have no unresolved bankruptcies
o You have at least one year remaining on your business lease

Account receivables or Invoice factoring

Another popular method of business financing is the selling of Account Receivables or Invoices. Businesses that extend credit terms to their customers ie: net 20, or net 30, allows customers some breathing room to pay their bills, however, this arrangement make it necessary for businesses to wait for payments and can sometimes have a stifling affect on cash flow.

A factoring company purchases receivables or invoices by providing you with a cash advance, thus, infusing your company with immediate cash, improving its financial situation. This advanced is any where from 70% to 85% of the value of the invoices or receivables. Most factoring companies charges a fee starting from 2% and it goes up from there.

So, if your business has been decline by traditional lenders, don’t despair help is on the way through these alternative financial sources.

Finance Payday Loan – Still An Option With Bad Credit

The day you wake up and realize you are in financial trouble makes you not want to get out of bed. You’ve been a good manager of your funds, you haven’t been extravagant, you’ve kept all kinds of records and your wife is still mad about not going on that Hawaiian vacation year before last – and yet now you’re one of those “everyones” who finds himself needing financial help. It was all those days off work that your insurance didn’t pay for that finally drained you to the point of ruining your credit. But all is not lost because there’s something called a personal finance payday loan designed just for you.

So if you’re tapped out on your master card cash advance or your home town cash advance, these loans are a most welcome option for people finding themselves over their heads in debt but still willing to pursue every avenue to work their way back to good credit status. As with any loan, there must be a clear understanding of all the loan requirements and restrictions as well as a definite plan for repaying the loan without default. What we’re saying is that with responsible use, this personal loan may not only get you through your financial crisis, but may also be the means of repairing your credit history.

It may surprise you to know that one rather small city recently had 2,600 foreclosures in one month and these statistics unfortunately are being multiplied throughout the country; so please understand you are not the only “everyone” who does have and is now having some kind of money problem. And the lenders have finally awakened to that fact, have now jumped on the rescue wagon and are offering loans to help responsible persons such as yourself with their problem.

All lenders are different and have different requirements for granting their loans. Some lenders may take into account the purpose of the loan, others may not even ask why you want the loan. The main concern of lenders is to make sure they get your business, first of all, and then to guarantee payments come in each month and on time, not a minute late. So they probably will take a close look at your employment history and monthly wage. Yes, they want your bad credit business because there is competition in the lending market and because lenders now realize that good people make financial mistakes and they are more anxious now to cater to those within this category of borrowers.

As you probably know,loans are either secured or unsecured; secured loans being ones backed up with collateral and unsecured being those without anything offered for security in case of default in payment. The personal finance payday loan we’re talking about is an unsecured loan meaning there is no collateral required. Therefore if you should default on your payment,you haven’t put up your home or any other possession of value, so the only recourse the lender would have would be to take legal action. However, if you owned a home, that still would be protected by law if such action occurred.

Be prepared of course to pay a higher interest rate and fees if you are getting an unsecured bad credit loan from a local lending source, depending on your employment and credit history and on your repayment potential. With a secured loan, having put up your house or other equally valuable property, your chance of getting far better terms and interest rates is greatly improved. Better yet, going online and researching lenders offering the best terms will usually bring you greater results in the quickest time.

Something else to consider is getting a personal loan for the purpose of consolidating all your debts into one. By carefully calculating your income, living expenses and an affordable loan repayment you could not only solve your need but also begin the process of restoring your credit. You see, this works by taking out a loan that you can afford to repay monthly without defaulting, pay off all other debts and then in the process of making your monthly repayments on time, your credit score is being improved. Hopefully, by having consolidated your debts, you will be able to manage your finances more successfully.

Whatever your reason for taking out a loan, whether it’s a secured or unsecured finance payday loan, it’s important to understand that this is not only to meet your present need for money, but is also to raise you from your present status of bad credit to your desired good credit status. Therefore, we urge you to be committed to do your research, settle on the most reliable lender with the best terms for you, and then concentrate on keeping debt free.