Loan Information - Home Loan - Student Loan

Wednesday, April 1, 2009

The higher the score you receive, the better off you will be when it comes to applying for credit. Your good credit showing means that creditors can be confident you will pay off your obligations promptly and according to the terms you have agreed upon. That means you will be eligible for more attractive finance rates, better terms, and other great features that individuals with lower credit scores would not have access to. However, the situation is altogether contrary for individuals having bad credit scores. If individuals are considering bad credit home loans, whatever your credit status, it is important to become an informed borrower, taking the time to carefully research the options available to them.

First and foremost, individuals are required to consider the following facts before applying for Bad Credit Home Loans:

1. How much a borrower can borrow?

2. Based on

3. Estimated value of home

4. Maximum loan-to-value ratio

5. Maximum loan amount

6. Less existing mortgage balance

7. Maximum equity line

Individuals can find a straight answer of all their queries of bad credit home loans in secured forms of home loans. To qualify for these loans, borrowers are supposed to bid any of their assets as of their guarantees of the amount of bad credit home loans. In this way, the borrower shares the risk factor with the lender and gets lower interest rates in return. The whole concept of collateral signifies that the lenders can realise their loan amount with that of assets of the borrowers, if the repayment is not made in time.

Bad credit home loans can provide you with emergency cash or other cash needs you have. These loans can be used a variety of ways including:

1. Debt consolidation

2. Education

3. Medical bills

4. New car

5. Vacation

6. Miscellaneous purposes

This all goes some way towards making taking out bad credit home loans product even more cost-effective than it is ever been. Get a cheaper interest rate and you will, quite simply, be saving money on how much you repay for your loan. So, you would not spend more than you need to raise finance and you will keep more of your disposable income available to you to spend. But, there is one drawback with some bad credit home loans products - some of their terms and conditions could actually cost you more than you will save in the long run.
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Labels: home loan

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Saturday, March 28, 2009

16 Tips for a Better Home Loan Decision

This collection of tips aims to address the concerns and problems which we most commonly see people experiencing. It's been built up from discussions with eChoice's expert telephone consultants and home loan managers.

Decide what really counts
Everyone has different needs. You may hate the idea of monthly loan fees. Or you may think a few dollars a month is fine – but only if you can pay extra funds into your loan and take them out when you need them at no extra cost. You may want the option of moving to a fixed interest rate down the track. Or you may want to buy as much house as you can possibly afford, even if that means a low-flexibility no-frills loan.

Deciding which of these options suits you is one of the hardest things about taking out a home loan. (eChoice's application process, its telephone consultants and its home loan managers can help you sort out your priorities.)

Consider all the lending alternatives
Twenty years ago, almost everyone got their home loan from a bank or a building society. These days, you have many other alternatives. Specialist home loan companies like RAMS and Aussie Home Loans are growing ever more popular. The latest trend is firms that can offer products from several lenders. Well over half of all US home borrowers now get their loan this way. (This is the way eChoice works; we’ve selected a panel of lenders to ensure that you receive the loan features, rates and service that best match your needs.)

Compare loans
The right loan for you will have a particular combination of features, service and interest rate. It’s unlikely to be the first deal that’s offered to you. There’s plenty of help available. You can find comparisons of loan rates and features at eChoice. eChoice takes comparison one step further with a Web-based computer program called ChoiceMatch, which identifies loan products and lender that match your individual needs, and lending experts who ring you to sort out the details and help you understand your options.

Have the lender come to you
Visiting someone else’s office can be an uncomfortable experience, and takes more time than you’d want. Some firms - including eChoice, the Commonwealth Bank and RAMS - can send a “mobile lender” out to visit you and discuss your needs.

Don’t judge a loan on its rate alone
Your best loan probably won’t have the lowest rate around. The features and service you get can be much more important. For instance, a few of the cheapest loans won’t let you make extra repayments. And those cut-rate loans typically have the highest application fees.

Seek out experience
Older friends and relatives will often provide valuable advice as soon as you tell them you need help. Don’t be afraid to tap their expertise. (Research by eChoice and the Roy Morgan Research Centre shows family and friends are the single biggest source of home loan knowledge.) And you can find more expertise outside your immediate circle. When you apply on the eChoice Web site, you get a call from an experienced lending expert – someone who’s been in the lending game for many years and will take the time to help you understand your options.

Find a loan you can live with
Many of today’s loan products let you take money out of your mortgage for needs like a car or school fees. These are great features – as long as they don’t stop you paying off your loan. Will you be strong enough to resist the temptation to use the money that’s available? Now’s the time to know your limitations: if you can’t discipline yourself to repay fast, you might be better off with a less flexible loan. And because it’s less flexible, that loan will probably have lower rates and fees.

Get a health check on your existing loan
When you check your existing loan against what else is out there, you may find worthwhile savings. Such "refinancing" works particularly well if you can add other debts into your home loan, letting you pay off a car loan or personal loan at lower home-loan rates. Make sure you don’t end up paying your debts off more slowly. Take the refinancing savings and use them to pay off your loan faster.

Service matters
Lenders may promise quick service, yet take weeks to deliver your loan. Big banks can be as slow as tiny mortgage companies. Paperwork gets lost or delayed. In these cases, it helps to have a representative who can push the lender along on your behalf.

Don’t take too much notice of "unbelievable rates"
For instance, some lenders have been offering "honeymoon" rates as low as 3.99 per cent. But those eye-grabbing rates "revert" to a much higher standard rate after a few months, and the fees can be fierce. The loan with the amazing rate may leave you paying more for years afterwards. Or it may only be available under very strict conditions – conditions you don’t want to meet.

Watch out for exit costs
Some loans carry a hefty fee if you pay them off early. One of these products may be your best loan – as long as you know you want to keep your mortgage for many years.

Understand how mortgages work
Taking out a home loan can seem scary, especially if it’s your first. Talking with friends and relatives will take away some of the mystery. eChoice’s Web site offers more than 50 fact sheets to help you understand the home loan process.

Don’t buy features you won’t use
eChoice often comes across borrowers who say they want a product such as an "all-in-one" loan, which lets you bundle your salary, borrowings and savings into one account. Many people find that a highly-featured loan perfectly suits their needs. But you pay higher interest rates and fees for all those features. After talking with our lending experts, some of our customers decide they don’t need as many expensive features as they thought they did. Whether you use eChoice or get your loan some other way, ask yourself: "what am I really going to use?"

Shark alert!
Taking out a home loan has less risks than investing (after all, the lender’s giving you money) but you may still end up relying on your lender’s judgements. You want those judgements to be made in your interest. Choose a lending organisation with a reputation for ethical behaviour. (A few firms have been known to charge just for showing you how their preferred loan will work. This service shouldn’t cost you anything. eChoice and many other lending groups provide it free.)

Beware the Line of Credit
Borrowers like the flexibility of being able to put all your savings straight into your loan, and then draw on it whenever you need it. Many loans let you do this. But some borrowers end up with a product called a "line of credit" – a loan which never gets paid down. eChoice offers line-of-credit loans, but they're appropriate for only a very small group of borrowers. eChoice home loan manager Mike Ayres calls this the single biggest problem he’s seen borrowers getting into recently.

Before refinancing, speak to your existing lender
Refinancing your loan can slash your borrowing costs. But some fixed-rate loans will cost you more to refinance than you could possibly save. In some cases, you’ll be better off doing nothing.

Labels: home loan, tips

posted by Moderator @ 11:59 AM 0 comments

6 tips to choose your home loan lender

Every one dreams of buying a home but most of us do not have sufficient funds in our bank account to make such a purchase. So we are left with the option of asking a housing finance company to finance our purchase. However choosing the best home loan lender is important if we have to escape all the hassles that are linked to availing a loan.

Also before you pick the lender for your home loan try to sort out in own mind the criteria you are looking considering your own credentials. Check on some important aspects of the loan, such as finance costs and interest rates. Tracing down a good home loan lender who can guide you through the entire loan procedure and help in accomplishing your dream of a nice house is a little difficult. So some of the following tips can help you in achieve your dream faster.

1.Finalize your property before the lender
You should always finalize the property you want to purchase before looking for lenders that would be ready to finance your house. This is important because some banks lend for a property that is already furnished while others extend for a self constructed property or property that is under construction. Thus it is better to finalize the category of your property first and then look for lender options. It will help us to focus in a defined area and extract all relevant information before finalizing on the lender.

2.Ensure your loan eligibility criteria
All the banks follow some eligibility standards for giving a loan. Primarily, it depends on your income and repayment track records. You can get details of all bank home loan criteria from individual banks or in the Rupeetimes Home Loan section and choose the one that can offer you maximum amount based on your income. The loan eligibility amount can also be increased if you club your and spouse’s income.

3.Fixed or Floating interest rate
One is always left in dilemma while opting between fixed and floating interest rate. It is always thought that a fixed interest rate means same rate throughout the tenure but sometimes it is adjustable after a certain period of time, provided which either your EMI amount or the loan tenure can increase. Thus it is better to clear this point in hand with your lender. On the other hand, if you are opting for the floating rate loan, make sure that your lender’s floating rate has come down at least over the past two years. Market scenario should also be analyzed if you planning to avail a floating rate loan as it depend on the economy’s interest rate. Some time back Rupeetimes.com covered an article describing the pros and cons of fixed and floating loan rates.

4. Processing fee is non-refundable
Banks always charge a fee in order to apply for loan with them. This fee is known as the processing fee and is non-refundable. Generally it varies between 0.50% and 1% of the total loan amount. However one should be clear that paying a processing fee does not mean that o loan will be sanctioned by the bank. Therefore it is always better to have written agreement with your lender. A switching fee is also charged if plan to switch from a floating rate to fixed rate. The catch is that you can try to negotiate on this. Some banks on negotiations even give you a flat processing fee.

5. Assure all the hidden costs
Mostly the interest rate charged by the bank is taken into consideration while taking a loan but there are large hidden costs involved with most loans that prick the borrower’s pocket. Hence it is advisable to decide on all legal charges, pre-payment charges, valuation fees, processing fee and other hidden costs before a loan is availed.

6. Be assured about the lender before making a choice
You should always be well informed about your lender as it will help to have a clear picture about the future. Depending on where you live, you can locate online comparison on rupeetimes.com that will tell you about a number of similar lenders suiting your needs. At a glance you can get all the right and detailed information you need and on what each lender can offer to its customers. If you match up what each lender can give you to what you are actually looking for and which best suits your needs, you can then compare it with others.

Labels: home loan, tips

posted by Moderator @ 11:57 AM 0 comments

Home Loan Tips

The home buying process can seem complicated, but if you take things step-by-step and you know how to choose the right home loan, you will soon be holding the keys to your own home!

Ten steps to buying a home

Step 1: Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. The calculators can help, but it is best to visit a lender to find out for sure. A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment!

Step 2: Know your rights

Step 3: Shop for a loan. Save money by doing your homework. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. Consider getting pre-approved for a loan.

Step 4: Learn about home buying programs

Step 5: Shop for a home. Choose a real estate agent, Wish list - what features do you want, Home-shopping checklist - take this list with you when comparing homes.

Step 6: Make an offer. Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.

Step 7: Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.

Step 8: Shop for homeowners insurance Lenders require that you have homeowners insurance. Be sure to shop around.

Step 9: Sign papers. You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!

Step 10: The House is yours now. Have Puja or hawan.

Terms used in Housing Finance

EMI: Equated Monthly Installment till the loan is paid back. It consists of a portion of interest and the principal

Floating Rate of interest: Rate of interest which varies with the market lending rate. This means that there is an element of risk of paying more than budgeted amount in case the lending rates goes up

Monthly Reducing balance: In this system interest reduces monthly with repayment of Principal amount

Annual Reducing Balance: In this system principal is reduced annually at the end of the year so you end up paying interest even for the portion of principal you have actually paid back

Fixed rate of interest: Rate of interest remains unchanged throughout the period of the loan

Processing charge: It's a fee payable to the lender on applying for the loan

Prepayment Penalties: When loan is paid back before the agreed term of the loan, then banks/ institutions charge penalty for the prepayment

Commitment Fee: Some institution charge commitment fee in case the loan is not availed within a stipulated period, after it is processed and sanctioned
Miscellaneous Cost: It is quite possible that some lenders may charge documentation or consultant charges .

Labels: home loan, tips

posted by Moderator @ 11:47 AM 0 comments