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The Things You Can Do To Fix Bad Credit

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When confronted with the reality of having bad credit, people’s first reactions are something along the lines of I’m doomed or This is it and “That’s it”. But there’s no need to be so depressed and pessimistic just yet.

Haven’t you heard about the wonders of credit repair?

Yes, I know, the critics are still going on and on about the need for consumers to be wary of professional credit repair companies and the kind of services they’re offering but whether you do it yourself or hire the services of a professional credit repair company, it’s undeniable that credit repair can indeed transform what was previously rated as bad credit into a good one.

If you’re interested to learn about the things you can do to fix bad credit and yours in particular – read on!

Bad Credit Can Still Be Erased

That’s the first thing you have to convince yourself of. The path to credit repair is not a short and easy one; so if you don’t have the patience and perseverance for it, I can already tell you now that you’ll be quitting even when you’re not halfway to the finish line. Because you’re doing it alone, the task is doubly harder so you truly need buckets of patience if you want to see this through.

Prepare Yourself For Changes

Don’t fool yourself into thinking that when all this is over and you’ve accomplished what you intended and that’s to repair your credit; you can immediately revert to your old form and once again not care about payment deadlines, overextending your loans, using up the remaining balance of your credit cards and so on.

If you want the effects of your credit repair achievements to last, then you must promise to yourself not to go back to your old bad habits. Besides, that’s also like throwing away everything you’ve earned!

Deciphering Credit Reports

When you’re about to fix bad credit you can ask anyone in the world with a minimum amount of intelligence regarding financial matters and they’ll tell you that the first thing you’ll always have to do is obtain a copy of your credit report and find out about your FICO scores.

If you have a FICO score that’s above 680, it’s time to set your heart at ease because for now, there’s nothing to worry about. But if you have a score lower than 550, you better wish that your credit report contains a number of errors or you’re in for a longer fight.

The True Cost of Bad Credit

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I am often asked the question; What does bad credit cost me?

It is a hard question to answer because of the individual’s circumstances and the fact that lenders are competing fiercely for customers

But I will give it my best shot.

Mortgages

If you know your credit score you will be in a position to make a pretty good guess at what interest you will be charged on a mortgage. In today’s (March 2006) market, mortgage rates for those in the top or prime category, with a score above 720, will pay around 6.25%.

As your score declines your rates will increase.

For those in the second tier, with a score between 700 and 720, rates will go up to around 6.38%; for those in the third tier, with a score between 675 and 699, rates will be about 6.91%; for those in the fourth tier, with a score of 620-674, rates will be about 8%; in the fifth tier, with scores in the area of 560 to 619, the rates increase to 9%; finally for those with the lowest scores, 500 to 559, the rate jumps to 9.82%.

On a $150,000 mortgage, your payments will be between $926 and $1411, a $485 difference per month.

Additionally, those in the lowest tiers will face higher loan origination fees.

Most bankrupts will be in the 650 area and if they behave themselves within two years of bankruptcy. You will save a lot of money if you push your score above 675 before trying for a mortgage.

These numbers are not written in stone and vary from lender to lender. According to some news accounts, you can qualify for the lowest rates with a score of 620, but proof of that is hard to find.

Auto Loans

You will not qualify for zero or low APR financing offered by manufacturers. You will have to deal with a sub prime lender and will be charged rates in the 21 to 24% area.

Again, loan origination fees may be high.

Credit Cards

Interest rates will be high up in the 30% area. If that was not bad enough, bad credit risks face fees that can choke an elephant.

Fees commonly charged to those with poor credit include the following:

Setup fee – while you can find some lenders that may not charge a setup fee, fees between $29 and $49 are not uncommon.

One time fees – these can be as much as $100

Account maintenance fees – $6 or $7 a month

Annual fees – $35 to $150

Bad credit credit card fees can easily run over $250 the first year, a little bit less after that, if you are not careful.

Other Hidden Costs

Bad credit can ruin your chances of getting a new job if you employer checks your credit report, which many do.

Some auto insurance companies will charge you higher premiums if you have bad credit.

Your utility deposit may be higher than for those with good credit.

You may not be able to rent an apartment, if the landlord doesn’t like your credit.

Even though just about anybody can find credit, no matter how bad their credit score, that doesn’t mean it will be inexpensive, or even affordable. It pays to shop around and read the terms of any offer of credit very carefully.

Rebuild your credit. Pay all your bills promptly and without fail. Only use a portion of your available credit, 20 to 25%. Avoid applying for new credit.

Within two years or so, if all goes well, you may qualify for better credit terms.

Mortgage Tips: Pros and Cons of Refinance Loans for People with Bad Credit

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If you’re stuck under some high credit card bills and your credit rating is slipping, one of the best ways to immediately improve your credit is a home equity loan. When the loan closes, home owners have cash-on-hand to pay off bills. The result: their credit rating starts to improve immediately.

Banking executive Dan Ambrose refers to those as the band-aid loans, also known as the 2/28 in mortgage lingo.

Most sub-time loans are short term loans, not A paper market, which means a fixed rate for two years then the loan adjusts.

He’s talking about 30 year refinancing mortgages for people with less than stellar credit. Lenders offer a home-equity loan at a set interest rate for two years, and then the loan converts to a variable rate loan, where the interest rate fluctuates with the prime rate at the time.

That’s the down-side to the band-aid loan. Lenders usually charge higher interest rates for people with lower credit scores. Dan warns consumers to prepare themselves for when the loan converts. Home owners could face a higher interest rate than the original home loan, and their monthly payments could hit them harder.

If consumers take the cash from their equity loan and pay-off their bills in full, after 18 months of perfect mortgage payments, Dan says the consumer’s credit improves to the point that now every bank will deal with them

If you think a home-equity loan could save you form your creditors, watch out for the current housing market in your area. Watching the marketplace, I saw the writing on the wall, says Dan. The real estate values are going down. They’re starting to slow down drastically.

And there’s the other potential roadblock for homeowners in this situation. Lower home values means less equity and possibly not enough equity to satisfy their payment needs. If the equity isn’t enough to pay all of your bills, and after two years your payments are even higher than before, you could possibly put yourself in a worse situation.

People with marginal credit or no equity do have some options such as the 125% loan to get ahead.

A 125% loan offers you a loan for more than your home is actually worth. Talk to a mortgage professional to make certain the credit risk is worth the return. Dan says most importantly; use the equity cash to pay-off those bills before you splurge on your dream vacation.

Home Mortgage Loans After Bankruptcy – Can You Get Approved For A Home Loan?

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Financing a home after a bankruptcy doesn’t have to be an ordeal. When you find the right lender, you can secure reasonable rates on your mortgage loan. You can improve your loan application with time and some cash leverage. Depending on your financial situation, it is possible to get conventional rates with a bankruptcy on your credit file.

Lenders Who Deal With Past Bankruptcies

With a recent bankruptcy, you can turn to sub prime lenders to obtain financing for your home. As soon as your bankruptcy has been finalized by the court, you can apply for a home loan. Your rates, however, will be about 12% higher than conventional rates unless you have significant cash assets.

After two years, conventional lenders will consider your loan application. Even though your bankruptcy will remain on your file for several years, lenders will be more interested in your current payment history and debt-to-income ratio.

Tips To Improve Your Loan Application

While you can’t erase your bankruptcy, you can improve your loan application to qualify for better rates. Down payments of 20% to 50% are the easiest way to become eligible for lower rates. Having cash reserves for two months or more will also help.

When it comes to terms, selecting an adjustable rate mortgage will help you qualify for more and at temporarily lower rates. Selecting a shorter loan period also lowers your rates. Furthermore you have the option of buying down your rate with points. But you may be better served by increasing your down payment and refinancing in a couple of years when your credit improves.

Research Lenders Before You Buy

Take some time to research loan estimates before you select a lender. It is the easiest way to save thousands on your future home loan. Make sure that you use the same numbers and terms when you request loan quotes from different financing companies. That way you will have precise numbers to base your decision on.

Once you have picked a lender, the hardest part of the process is over. In ten minutes or less, you can complete your loan application online. Your loan contract will be delivered in a couple of days for your final review with funds soon to follow.

10 Things To Consider – Most Homebuyers Make A Mistakes On

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A homeowner loan is a type of loan that has become increasingly popular as a result of property prices within the US rocketing over recent years, and homeowners enjoying increased levels of equity in their homes. Homeowner loan provide an effective and affordable borrowing solution for many homeowners, but you still have to give careful consideration to taking out this type of loan.

There are a number of things to consider when you are thinking of taking out a homeowner loan and this includes:

Can you afford the loan?

If you cannot keep up with repayments on a homeowner loan and you default on your repayments you may risk losing your home, as these loans are secured against your home. You must therefore ensure that you can comfortably afford repayments and can cope with any rises in interest rates and repayments.

Can you afford the risk of falling into negative equity?

If you take put a homeowner loan secured against the equity in your home then you may find that you fall into negative equity in the event that house prices fall, and this is something that you should bear in mind when taking out this type of loan.

How much are you looking to borrow?

You need to consider how much you need to borrow, as different lenders offer different borrowing levels. For example, some will offer up to a percentage of your equity, some will offer the full amount of your equity, and some will offer over and above your equity levels.

How long do you wish to repay over?

The longer the repayment period that you choose for your homeowner loan the less you will pay each month but the more interest you will pay over the term of the loan. You therefore need to weigh up the pros and cons and determine what sort of repayment period you want to look at.

What will you use the loan for?

Homeowner loans can be used for one of a range of purposes, but some will benefit you more than others. For example, you could use the loan for something such as a luxury holiday or a new car, but you could also use the loan for home improvements, which can add value to your home, or debt consolidation, which can save you money on a monthly basis and interest over the longer term.

Do you have bad credit?

If you have bad credit you still stand a better chance of getting a homeowner loan over an unsecured loan, but you will pay a higher rate of interest than someone with decent credit, so you need to decide whether you can afford this higher interest rate and the repayments attached to it.

Which lender should you use?

There are many lenders that offer homeowner loans, and you need to compare the different products available from a range of lenders in order to determine which offers the best deal for your needs, circumstances, and pocket.

Should you use a broker?

There are a number of experienced brokers that deal with homeowner loans, and for some people – particularly those with bad credit that cannot afford to keep making applications in case it further damages their credit – using a broker could be the most effective option.

Where should you look for a homeowner loan?

There are a number of avenues that you can take, from visiting your local bank or lender to ringing around to compare quotes and prices. The easiest and most convenient option is to look online, where you will enjoy a choice of lenders offering an array of competitive deals on homeowner loans.

Are there any charges and penalties to consider?

Some homeowner loans involve set up fees, and you should familiarize yourself with these. Some will also involve early redemption fees, and if you are looking to settle your loan early if you can you should also take these into consideration.

Why You Might Consider Getting An FHA Loan?

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What is an FHA Loan?

The Federal Housing Administration (FHA) is operated by the Department of Housing and Urban Development (HUD). The FHA has the responsibility of administering the government insured home loan programs. Like a VA loan, the FHA does not actually lend the money for the home to the borrower but instead insures the loan so that more lenders will be willing to take on the risks of granting the loan to a first time home buyer.

There are many different FHA home loan programs available. One of the most popular is the 203(b) home loan. This particular program is a fixed rate loan for owner-occupied homes and only requires a minimum of 3% down from the borrower. In addition, this particular loan program allows the use of 100% of the closing money to be a gift from a government agency, family member, or non-profit organization.

Benefits to using an FHA home loan

Credit requirements for a first-time buyer are less than what might be needed for traditional type loans. In other words, a person or family with some minor credit problems in the past would find it easier to get a home loan through an FHA home loan program than if they tried to go it alone.

FHA home loans are assumable, which allows the buyer to take over a previous mortgage without the additional cost of obtaining a fresh, new loan. Another important factor is that the seller or lender must pay for part of the closing costs (called non-allowable costs) while the buyer’s allowable costs can be infused, in part, into the loan.

Most, if not all, mortgages require monthly mortgage insurance but the monthly mortgage insurance premium for an FHA loan is less expensive than what is commonly found in traditional loans. An FHA loan also allows for a higher debt ratio than most traditional loans. Individuals and families who earn a lower income will find this an important factor when shopping for a home loan.

FHA Loan Overall

Home shoppers should be aware, however, that the FHA will limit the loan size according to the area of the country in which you live or wish to purchase the home. You should visit the FHA website to learn what the cap is for your particular area, as well as to learn of any other restrictions that may apply to you.

The official website is also a great place to learn more about some of the other programs that are available.

Benefits of Home Loan Refinancing

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When you refinance a home loan you’re acquiring a loan and the money obtained from it has to be destined to pay off the outstanding loan so the new loan will be secured with the same asset as the previous loan.

There are a few reasons why someone would want to do that. You can lower your monthly payments on your home, you can benefit from lower interest rates or you could use extra money to consolidate debt.

Paying less interest

If you had bad credit when you got your current home loan, you probably are paying a high interest rate and thus you’d benefit from a refinance by reducing the amount of money paid on interests. If you’ve been paying religiously your monthly mortgage installments, then you’ve probably improved your credit over time and you should be in condition of getting a refinance mortgage loan at a reasonable rate.

When is refinance convenient?

You may wonder when is refinance convenient, the truth is there is no general principle on this matter, but most financial assistants consider a 1.5% lower interest rate to be worth refinancing. If you refinance for a higher amount than the current loan you may also get rid of other debt like credit card balances which have a lot higher interest rates.

Finding a lender

There are many lenders dealing with refinance mortgage loans, so if you are determined to find the best deal for you, you will have to do a careful research. You can start by heading to one of those online sites that offer comparatives between lenders and advice as to which lender best suits your needs. This kind of sites save you the trouble of searching everywhere for lenders and requesting loan quotes from each one.

Seek Help if you must

Don’t hesitate to seek for professional help if you feel this is a complicated financial transaction for you. There are many financial assistants willing to offer you their advice on how to refinance your loan and they will give you tips to raise your credit score and improve your credit history. There are many online sites offering this kind of advice too.

Insure Your College Student’s Car with Confidence

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As a concerned parent, you want the best for your student, including their safety on the road. Sending your child off to college comes with a new set of challenges, and choosing the right car insurance for them is one of the most important decisions you’ll make. College students are considered high-risk drivers and typically face higher insurance rates, but with the right coverage, you can keep both your peace of mind and your wallet intact.

Factors to Consider When Insuring a College Car

When it comes to insuring a car for a student away at college, there are several factors to consider. Here are a few:

  • The location of the college and the student’s living arrangements (on-campus, off-campus, etc.).
  • The type of vehicle the student is driving (make, model, year, etc.).
  • The student’s driving history and claims history.
  • The coverage limits and deductibles desired.

How to Compare College Car Insurance Quotes

Comparing college car insurance quotes is the best way to ensure you’re getting the best coverage for your student at the most affordable price. Here’s how to do it:

  • Gather information about the car and the student’s driving history
  • Get quotes from at least three insurance companies.
  • Compare the coverage options, discounts, and pricing of each quote.
  • Choose the best option for your student’s needs.

Tips for Saving on College Car Insurance

College is expensive enough, so why pay more than necessary for car insurance? Here are a few tips to help you save:

  • Look for discounts. Many insurance companies offer discounts for good students, multiple vehicles, and safety features.
  • Choose a higher deductible. This means you’ll pay more out of pocket in the event of an accident, but it will lower your monthly premium.
  • Consider a telematics device. Some insurance companies offer devices that monitor your driving habits and can lead to lower rates if you’re a safe driver.

In conclusion, insuring a car for a student away at college is a critical step in ensuring their safety and peace of mind. By considering the factors mentioned above, comparing quotes, and seeking discounts, you can find the best coverage at an affordable price. Protect your student and their ride today!

Find Affordable Auto Insurance with Ease: A Simple Guide to Comparing Quotes Online

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As a driver, you know the importance of protecting your loved ones and assets on the road. But with so many auto insurance options available, it can be difficult to find the best coverage at an affordable price. That’s where comparison shopping comes in. By comparing quotes from multiple insurance companies, you can find the coverage that fits your needs and budget.

However, many auto insurance companies make it difficult for you to compare quotes, making you jump through hoops just to get a basic idea of their coverage options and prices. They hope you’ll just choose the first quote you receive and sign on the dotted line without shopping around. But with a little bit of know-how, you can easily compare quotes online and find the best coverage for you and your family.

Here’s how to compare auto insurance quotes online

  1. Gather Information: Before you start shopping, gather information about your vehicles and drivers. You’ll need to know the make, model, and year of each vehicle, as well as the ages, driving records, and insurance histories of all drivers.
  2. Use a Comparison Site: Use a comparison site that allows you to compare quotes from multiple insurance companies. Simply enter your information and the site will generate quotes from several companies.
  3. Compare Coverages: Pay attention to the type and amount of coverage each quote offers. Make sure each quote covers the same type and amount of coverage so you can accurately compare prices.
  4. Look at the Deductibles: The deductible is the amount you pay before your insurance kicks in. Compare the deductible amount for each quote and consider how it affects the overall cost of the coverage.
  5. Consider the Company’s Reputation: Consider the reputation of each insurance company you’re considering. Check their financial stability, customer service, and claim-paying process.

By following these simple steps, you can compare auto insurance quotes online and find the coverage that fits your needs and budget. Don’t let auto insurance companies take advantage of you. Take control of your finances and find the best coverage for you and your family.

7 Common types of Auto Insurance Coverage

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Knowing which auto insurance coverage is right for you can seem intimidating and confusing, but understanding your options is key to making sure you are fully protected from any unexpected accidents. Whether you are a first-time driver or a seasoned road warrior, taking the time to learn about the various coverage options is essential to finding the right insurance policy for you.

Liability Coverage

-The most basic form of auto insurance, required by law in most states, covers bodily injury and property damage to other drivers in an accident for which you are at fault.

Comprehensive Coverage

– Covers non-collision damages such as theft, vandalism, and natural disasters.

Collision Coverage

– Pays for damages to your vehicle if you are involved in an accident regardless of who is at fault.

Medical Payments Coverage

– Pays for medical expenses to you and your passengers if you are injured in an accident.

Uninsured/Underinsured Motorist Coverage

– Covers medical expenses and damages to your vehicle if you are involved in an accident with an uninsured or underinsured driver.

Rental Reimbursement Coverage

– Pays for rental car costs if your vehicle is damaged or stolen and you need to use a rental car while it is being repaired.

Roadside Assistance Coverage

– Pays for roadside assistance if your vehicle is disabled due to a mechanical breakdown or accident

The Bottom Line

By understanding the various types of auto insurance coverage, you can make an informed decision about the coverage you need for your vehicle. It’s important to make sure you have enough coverage to protect yourself and your family in case of an accident, but also to make sure you are not paying for coverage you don’t need. Be sure to do your research and speak to an insurance agent to make sure you get the best coverage for your needs and budget.