HomeLoan Guide

Information articles and view on Loan.

Availing of a Bad Credit Home Equity Loan

It is said that the love of money is the root of all evil. However, the importance of money truly cannot be denied. Life is just so much easier if you have money.

Let’s face it: people need money in order to survive.

This is the reason why the money market today is the largest market in the world. However, the world today has little tolerance for people in need of money.

Although you can say that various loans are available for people who need cash, you need to submit a lot of documentation before you can avail of those loans. In fact, you can say that you need to prove you don’t need money in order for someone to lend you some. This can be pretty frustrating, which is why people sometimes turn to bad credit home equity loans.

Bad credit home equity loans allow people to borrow against their real property even if they do not have a good credit rating. No human being is perfect. Even the most brilliant accountant has got to mess up his or her budget sometime. That’s why a person’s bad past credit should not be held against him or her.

When you have nothing else to turn to, a bad credit home equity loan can get you the money that you need. However, you also need to remember that desperation does not equal stupidity. You need to choose the bad credit home equity loan that you avail of wisely. So what should you do?

Well, there is always the option of getting a financial consultant to help you. A financial consultant may have direct connections with various financing companies which can offer you bad credit home equity loans. Getting a financial consultant, however, isn’t really an option since it will take some cash. So what are your other choices?

You could try researching on the internet. The internet actually has a lot of resources on various financing companies which can help you out in your time of need. Another advantage of the internet is that you will be able to contact these companies without even having to leave the comfort of your home. This means you will be at your most comfortable when doing something very uncomfortable. You will be able to think about your options better.

When you are trying to decide between companies that offer bad credit home equity loans, the internet is the best tool you can use. This is because the internet can help you gather information about the various loan programs of every company and compare them.


Author: Daniel Roshard
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5 Ways To Qualify For a Lower Interest Rate On Your Home Equity Loan

If you have a home equity loan and are concerned with the rising interest rates, then there are several steps you can take in order to lower the interest rate.

Step #1 Refinance and Consolidate Your Loans

An affordable option may be to refinance your primary mortgage and home equity loan. By refinancing both loans you will then be able to consolidate them and have only one monthly payment. When you combine both loans, you are then able to qualify for a lower interest rate, since now you have only one mortgage. It may be in your best interest to look into a fixed interest rate, which will allow you one set monthly payment that will not fluctuate with the interest rates.

Step #2 Convert to a Second Mortgage

Some home equity loans will allow you to convert your equity loan into a second mortgage. However, once you convert the equity loan to a second mortgage you will not be able to borrow against it. Since second mortgage loans pay out a fixed amount in one sum, they have a fixed interest rate.

Step #3 Apply for a New Home Equity Loan

Another way for you to lower the interest rate on your current home equity loan is to apply for an entirely new home equity loan. This is a good option when you are not able to convert your current equity loan into a secondary mortgage.

Step #4 Boost Your Credit Score for a Lower Rate

It is true that the better your credit is, the easier it is for you to qualify for low interest loans. The best way to improve your credit is to reduce your outstanding balances, pay your debts on time and avoid skipping payments. Although the process of improving your credit may take time, it will be well worth your while and you will save more money.

Step #5 Shop Around

When looking to reduce your home equity loan interest rate, it is important to compare other lenders deals. Contact mortgage companies, credit unions, banks and other finance institutions.


Author: C.L. Haehl
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A Home that Gives You Money: Home Equity Loan

Very often we crave for financial stability but a limited source of money restricts ourselves to fulfill our desire. However, lucky are those persons who have a home of their own! With the help of their home, they can at least manage fund to fulfill their wish. And in the financial market this way of earning money is termed as home equity loan.

Many persons have been benefited by using home equity loan. They call it their ideal loan as they can use this loan for anything they want, right from home improvement to paying off any unpaid bills. Moreover with this loan, they can even consolidate unpaid debts.

It is actually your home which is the determining factor in this loan. Here you can borrow money against the equity of your home. But what does the term equity mean? Equity implies the market value of the borrower’s property in excess of all debts to which it is liable. The value of equity is generally measured by subtracting the outstanding mortgage balance from the current market value of your home.

In home equity loan, you can raise a large amount of loan, up to ฃ100000. At the same time, you get the facility to repay the loaned amount up to maximum of 25 years, which is definitely a comfortable duration.

From which organization you can avail home equity loan? Well, options are innumerable but choice is one. If you research properly, you can come out with the decision that online lenders offer this loan at attractive loan quotes and at a favourable loan terms. So, you can readily go for this method to get the best lender having the best offer.


Author: Amanda Thompson
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Dangers Of Home Equity Loans

A home equity loan is very attractive to home owners since it can help increase immediate cash on hand, provide a way to fund repairs or renovations of the home, and offer an extended line of credit. A fixed rate equity loan can reduce monthly payments, and an extended line of credit can help pay down high-interest credit cards or personal debt. Still, there are some dangers of home equity loans.

Some lenders and brokers can promise a lower interest rate or lower monthly payment, but the payment can go up if the borrower’s credit score decreases. Homeowners who are not able to meet the demands of the change can put their house at risk of repossession if they cannot repay the debt in time. Consolidating debts or refinancing a home in this way is not a good idea if the borrower ends up instead with a larger loan that they cannot pay off easily.

Even when money is saved on the home equity loan or line of credit itself, some borrowers may end up overspending in other areas. If credit cards are paid off, they may start buying things on credit again and end up making monthly payments beyond what is affordable. Plus what happens when the funding estimated for a project the loan was obtained for - house repairs, college expenses, unforeseen medical emergencies – exceeds the initial funding amount? Borrowers may find themselves spending more money than they sought to save.

Some mortgage companies might charge excessive fees that the homeowners don’t know about until they sign the final papers. This is becoming increasingly common, and it’s important to know all of the terms and final costs well before hand. Other poor lender practices include equity stripping, loan flipping, and over borrowing. Equity stripping is when a lender will inflate the income on an application to secure the loan. This results in the borrower not being able to pay back the amount. Loan flipping is when a lender increases the loan amount by increasing the current mortgage. This results in an overextended amount that the borrower cannot pay. Over borrowing involves extending a loan for more than the house is worth. This borrower cannot receive a tax deduction on this amount and may not be able to keep up with the payments.

Although there are many advantages of a home equity loan, there are some dangers and pitfalls to look out for. Sensible budgeting and financial practices are important to stay ahead of payments, no matter how small or large the amount may be.


Author: Patricia Lewis
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Buy A House Even With Bad Credit: Home Loans For Women With Bad Credit

You don't know how it happened. You pay off credit card debts as soon as you receive your bill. You plunk down rent money on time. You've been making out your check to your car dealer like clockwork. So, why are brokers and lenders only willing to give you home loans for women with bad credit?

Bad things happen to good people, and receiving negative score is one of them. It's even possible you don't deserve your negative rating. Your credit card company could have erroneously logged your payments as delinquent. This has happened to others countless of times before. Or, your car dealer could have mistaken you for another client whose checks bounced.

What Happens Now?

If you find yourself on the receiving end of home loans for women with bad credit, make inquiries. Do you truly deserve the negative rating? If you do, don’t despair. There are home loans for women with bad credit. If you don't, do not take it sitting down. You shouldn’t accept home loans for women with bad credit when you know you've been paying off your debts promptly and correctly. Have your credit history reviewed and corrected.

Home Loans for Women with Bad Credit

Borrowing from a subprime market lender is the easiest way to obtain home loans for women with bad credit. Subprime lenders are so eager to kowtow to borrowers they actually provide you with plenty of elbow room for negotiations. The catch is that finding a reliable subprime lender is difficult. Most subprime operations are fly-by-night and predatory. Additionally, subprime loans come with higher interests. This is because your bad credit makes you a financial risk. From a lender’s viewpoint, higher interest rates will justify taking on the risk that you pose.

Another way to avail of home loans for women with bad credit is through the Federal Housing Administration. AN FHA loan is insured by the government. This makes lenders more complacent about giving loans to women who are lumped in the high-risk category.

Qualifying for an FHA Loan

To qualify for an FHA loan, you must have at least one year of acceptable credit history. The good thing about FHA loans is that you can make as low a downpayment as possible. In fact, your downpayment could even be partly or fully shouldered by a non-profit organization or another government agency.

Correcting Negative Credit Rating

If your negative credit rating is absolutely undeserved, have it corrected. The following are steps you would do well to follow in having the mistake corrected:
  1. Request for a free copy of your credit report. Do this within 60 days after you were denied the loan. Most people do not know that annually, they are entitled to at least one free report from each of the three major credit bureaus.
  2. If loan rejection is due to the information your credit bureau provided, request for the contact number of the said bureau.
  3. Ascertain how, when, and where the mistake occurred. Then, have it corrected for free. All you have to do is submit your request for correction. You may use a dispute form or a separate sheet. Be sure to send it along with supporting documents, such as receipts or other proof of payment.

There are home loans for women with bad credit. Whether or not you deserve a negative rating, it's still possible for you to own a house. At this point, it's not your bad credit that matters. It’s what you do with it that does.


Author: Rony Walker

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Choosing Home Loan Consolidation

Home loan consolidation always seems to be an easy answer for debt overload, but is it really? After all, you are putting the future of your home out there at risk in order to get rid of those high interest bills. On the other hand, you now put your home at risk if you should miss making your payments even if you are making the payments on your primary mortgage. Is it a wise decision? In most cases, it probably isn't a wise decision, but there may be circumstances that justify home loan consolidation.

Protect your credit

When you find yourself in a bind financially, the first thing that comes to mind is home loan consolidation. Before you choose this option, you want to think carefully at what you are putting at risk and determine if that is really the best solution. In most cases, it is better to either work with the creditor on a plan to lower the payments or work with a debt management counsellor, especially if the debt has reached the point where your credit is affected. Once there are marks on your credit, the impact of paying off the debts with a home loan consolidation is lessened.
If, however, you have not yet missed any payments but are simply struggling to pay all your debt, a home loan consolidation may be justified in preventing adverse remarks on your credit report. Even with that in mind, you have to be ware of the fact that a home loan consolidation means you essentially have two different payments for your mortgage, and that failure to pay either one of them will result in foreclosure.

Consolidation or debt management

The decision to choose home loan consolidation or debt management is a difficult one and should be based on your individual needs. If your bills are already behind, you actually stand to gain more with debt management since the potential for a reduction in interest rate is quite probable. If you consolidate using your home as collateral, you will not remove the negative rating on your credit even though you pay the debt in full, and you would be paying interest on it as well. Because of the potential risk, unless you still have your credit in tact or your creditors refuse to accept a program of debt management, you should avoid a home loan consolidation. Besides the fact that you put your home at risk for foreclosure is the fact that you tie up the equity in your home, and if you need it for home-related repairs or remodelling, the funds are not available. Always save the equity in your home for things that are a direct part of it except in rare cases.
Is it worth the risk to save on payments?

The question you must ask yourself before entering into a contract for home loan consolidation is if putting your home up as collateral is worth the potential risk. It’s a risk not only of foreclosure if you should default on either mortgage, but also a risk if you should need the equity in your home for major repairs in the near future. Give it careful consideration before you choose that route, and make sure that you understand the potential risks and that there is no alternative method.


Author: John Mussi
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Benefiting You Without Security- Non Homeowner Loans

You don’t have assets to provide as collateral; either you are a tenant or non homeowner. Now, you are facing scarcity of money, so you are looking for some financial assistance. Taking loan is very tough task for you, because you have nothing to provide as collateral. Don’t worry, non homeowner loans are knocking at your doors.

Non homeowner loans are available without placing your assets as collateral; but you have to provide some documents such as, you must be in a fulltime employment, you must have residence proof, age proof, and you must have a contact number; either mobile or landline. Making repayments on time, it will help you to improve the credit history.

If you are suffering from bad credit history such as, CCJs, IVAs, bankruptcy, arrears, and so on, and looking for financial assistance, then you don’t need to be worry, because non homeowner loans are available for both good credit borrower and bad credit borrower also. If you are a bad credit borrower, then you have to pay higher interest rate, loan will avail for shorter period, compared to good credit history borrower.

Non homeowner loans can be used for various purposes such as, buying a new home or car etc, to consolidate all your debts into single one from a lender, for wedding, education or business purposes and so on. In non homeowner loans, you have to pay higher interest rate, shorter repayment term, and you can’t negotiate with the lender, owing to risk of the lender.

Online method is available for faster applying. Through this method, you can research various quotes of the various lenders from home with the help of internet. The main benefit of this method is that approval within least time compared to other methods. If you are looking for loan, then you can move for non homeowner loan through this method.


Author: Peter Taylor
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Fast Home Equity Loans

Home equity is the amount of money borrowers have already paid, against the total value of their homes. It can easily be calculated by subtracting the amount of the mortgage balance from the current fair market value of the property. Any amount, by way of liens or second mortgages owed by homeowners, must be subtracted from the appraised value to determine home equity accurately. Home equity allows homeowners to use their own equity to acquire loans. They can get small loans for various purposes, such as for paying tuition fees or any other immediate need. They also offer certain tax benefits to the borrowers.

Fast cash home equity loans allow the borrowers to avail of cash quickly, against the equity that they have build on their houses.
Fast home equity lenders usually verify the information provided by the applicants. After they find that everything is in order, they go ahead and deposit the loan amount into the bank account of the borrowers. The borrowers of fast cash home equity loans are usually given thirty days for repayment. However, in some cases, borrowers can provide the company with a post-dated check of the repayment amount. This repayment amount includes the interest charged and any service charge that the lending company might levy.

Fast home equity loans can be availed of through various lending companies that specialize in providing these loans. They can be contacted online or over the phone through the information provided by these companies in various advertisements. Usually, to get a fast cash home equity loan, applicants have to provide proof the equity of the home that is built up. This can be done by providing a current appraisal of the property and a document from the lenders, showing the amount that has already been paid against the loan.


Author: Max Bellamy
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Guide to Home Equity Loans

Here is a useful guide to home equity loans. A home equity loan is quite simply a loan against your house. Another term for a home equity loan is a mortgage or second mortgage. Home equity loans are also known as equity release schemes.

Here is a useful guide to home equity loans. A home equity loan is quite simply a loan against your house. Another term for a home equity loan is a mortgage or second mortgage. Home equity loans are also known as equity release schemes.

You are borrowing on what your house is worth. If your house is paid off, the term is "mortgage" and if your house is not paid off but has equity, the term is called a "second mortgage". For ease of understanding however, this article will refer to these loans as Home Equity Loans.

A home equity loan is a second loan that you take out on your home in addition to your mortgage. This is also called a second mortgage. This enables you to tap into your equity to get cash without refinancing your first mortgage. Many people think that the only way to access this cash is to sell their homes. The reality is that you can take out home equity loans to free it up without having to move at all!

Equity is the difference between the amount you owe on your current home mortgage and the current value of your home. Lot of finance companies today offer good deals on home equity loans, letting you borrow money based on the available equity on your home.

This can be explained further, suppose you sold your home, you will be left with a certain amount of money after paying off your mortgage, which would mean actual cash in your pockets. A home equity loan allows you to get that cash without having to actually sell your home or property.
The amount you can borrow is determined by taking a percentage of your home's appraised value and subtracting the balances of any outstanding mortgages. A home equity loan is fairly easy to get, if you are a homeowner. Some home equity loan companies will allow you to borrow up to 125% of what your house is worth at the current market prices, less the amount that you owe on your mortgage.

A home equity loan is usually a one-time loan, which is paid out in a lump sum. A home equity loan can be used for anything and is usually a fixed interest rate loan.

The cost of the loan will depend on many factors including your personal circumstances, the amount you wish to borrow and over what period you wish to repay back the loan.

Some good uses for home equity loans include debt consolidation, buying of a new car, home improvement, emergency medical expenses or luxury holiday.

People with poor credit ratings will find a Home Equity Loan more easily accessible to them because the lender is taking a lot less risk as the loan is secured against their home.

A Home Equity Loan will usually mean that you get better interest rates on the loan, but you should always remember that your house is at risk if you fail to repay the Home Equity Loan.


Author: John Mussi
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Bad Credit Home Equity Loans Basics

There are many people who suffer from bad credit, this can happen to a person from a lot of different reasons, some of these reasons have not much to do with the person ability to conduct himself in a financially proper and responsible way. The problems begin when a person with bad credit needs some capital to make some changes in their life, then they will discover that many of the banks and loan companies are very hard to get any credit from, and they will struggle to find someone who will authorize a loan that will provide them with the funds they need.

But considering taking a home equity loan or any loan even if you have a bad credit rating in home equity is still very much possible, there are many companies that specialize in helping people with bad credit to find the way to the loan they need, in many cases you will need to work a little harder and maybe pay a little more, but you will still be able to get the loan that you need.

The fact is that if you have a property or if you own a home you still have many ways to back a loan you will need to take, and that many banks and companies will be happy to provide a loan based on your equity, the important thing here is that you will need to know and remember that you are placing your home on the line here, and that failure to pay the loan might result in losing your property.

As with all loans the bad credit home equity loan has a few things you should look at closely before you make a decision, the interest rates and conditions of the loan will probably not be as good as they are for normal, good credit costumers, this is a way of the bad credit home equity loan companies to take the risk associated with giving out loans to people with bad credit, you need to examine the rates that are given to you because having bad credit does not mean that you have to pay an unreasonable home equity loan interest rate.

The loan conditions and the credit rate are established by comparing credit reports and other financial statistics, and these result in a number that represents the clients credit rating, it is a number between 300 and 900, and based on this ratings you will be given the terms for your home equity loan. Anyone who has a credit rating of 600 and above will usually have no problem taking out a home equity loan, but those who have less will face a bad credit home equity loan terms, and will have to start negotiate the best deal they can get.

As discussed earlier, if your credit is below 600 then you will need to understand that the loan companies or banks will offer you conditions that are less then what they offer the 600 and above client, and that you will need to closely examine whatever deal is given to you and make sure it is not only reasonable in terms of the numbers, but that you could make the payments for the loan over the time specified.


Author: Daniel Roshard
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10 Things Commonly Unknown About Home Loans

When you buy a home for the first time there are a lot of things that the average person does not know about mortgages. Through the home buying process most of us learn a great deal, but had we known these things before hand the process might have been a bit easier, and there are even ways that you can save money! Knowledge is key when dealing with mortgages, and here you will find ten things that you may not have thought of before.

  1. 0% Down Really Can Happen

    You truly can buy a home with zero payment upfront. No, this isn't available to everyone, but for first time homebuyers and those with limited income they may find that zero down is a real option for them. In fact, not only do you not have to put any money down you'll also find that there are government agencies that will pay your closing costs for you. Even for those that don't qualify for the zero down loans there are some great mortgage rates that will allow you to get into a home with relatively little down.
  2. You Might Want To Consider an Adjustable Rate Mortgage

    In the past adjustable rate mortgages or ARM's have gotten a bad name because they are associated with interest rates that fluctuate each year. The thing is that ARM loans come in many varieties such as a 5-1 arm, which will be fixed for the first give years and then resets each year after that. This can be an ideal way to save money because ARM loans have interest levels in the 5.8% range while a traditional mortgage is in the 6.3% range.
  3. Adjustable Rates Can't Fluctuate All That Much

    As mentioned above, ARM loans have gotten a bad reputation in the past because the interest fluctuates over time. What most people don't know is that the rates cannot simply go through the roof, as they typically have a cap on how high they can go. This makes an ARM loan a great choice for a lot of people because the rate can't go all that high and you can often start out with a much lower interest rate for the first one to five years.
  4. Interest Rates Can Save You a Bundle

    If your home mortgage currently has an interest rate of 7.5% and you've seen that current interest rates are less than 6.5% it may not sound like a lot, but it can save you more than $100 a month if you refinance at the lower cost. Of course, you still have closing costs when you refinance, but if you are going to live in the house for at least two or three years you'll find that you will break even quite quickly and then continue to save money over the long run. One interest point can make a lot of difference over the course of a year, and certainly over the course of a 30-year mortgage.
  5. Mortgage Brokers May Be Worth Your Time

    If you don't know a lot about mortgages and you need a bit of guidance, you may find that a mortgage broker can help you decide what type of mortgage is perfect for you and your circumstances. Mortgage brokers can help do a lot of the leg work researching the products and loans offered by certain institutions or lenders and then help you decide which the best is for you.
  6. Your Credit Union is a Great Resource

    When you check with your credit union or bank you may find that they simply are able to offer you the best interest rate you can find. A credit union can often offer mortgage rates for up to 1% less than financial lenders. The Internet is also a great mortgage resource, as it is a very competitive market and you can find many lenders that are willing to work with you no matter the situation.
  7. You Don't Have To Use a Mortgage Broker

    A mortgage broker can be really helpful if you don't know any thing about mortgages or if you have a troubled credit history. But, if you are one of the lucky home buyers that has perfect credit and is able to put 20% down on the purchase price you'll find that your lender and your realtor can often get all of the work done, so there is no need for a broker.
  8. The Internet Has Great Tools

    There are a lot of tools on the Internet that will offer to do your math, such as calculate mortgage payments, how much of your payment will go toward the principal, and more. These tools are often helpful in deciding how much you can afford to pay each month.
  9. Paying Points on Your Mortgage Can Work Both Ways

    For some people paying points makes sense, and for others it does not. If you pay points up front you can often get a lower interest rate. The lower interest makes senses if you plan to live in the house for an extended period of time, but if you don't you're probably better off skipping the points.
  10. You Can Take Your Mortgage with You

    Starting in 2003 you could get a mortgage that was as portable as you are! These mortgages can be transferred from home to home when you move, paying only a small interest fee each time it is transferred to a new home.As you can see, these ten things can help you get the mortgage that's right for you. Armed with the right information mortgages aren't so confusing!


Author: Andrew Webber

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Buying a Home With a Mortgage Loan

Buying a home by means of a mortgage loan is probably one of the biggest commitments, money wise, which people can make. With so many mortgage options on the market these days, it is important to get all the information you can before signing for a loan, especially if you are a first time home buyer. All the choices and options can be extremely confusing to anyone who is not familiar with the world of mortgages.

Finding a deal to fit your needs

Nowadays it is possible to find superb mortgage advice and thereby deals which will suit your individual needs and financial state of affairs. Once again it should be emphasised, however, that it is well worth exploring the fine print and various options provided by differing products, as committing to the wrong mortgage plan for your personal circumstances can prove to be a costly mistake. One option to take into account, for example, is the choice between an adjustable mortgage rate and fixed rate repayments. The former allows for fluctuations of interest rates, generally giving you lower rates… although there is little stability. The fixed rate payment on the other hand may provide better peace of mind and stability when it comes to planning your budget. You can plan ahead because you know exactly how much you are going to spend every month.

The internet is a good place to look for a mortgage. Here you will find a great variety of products which you can fully explore at your leisure, without the pressure of a salesman coaxing you into a deal. Once you find a deal you think will suit your individual requirements it is easy to apply for the mortgage online. You can even find mortgage calculators which make it even easier to tailor your own mortgage online.

Repayment of your mortgage

Repaying the capital on a mortgage can be done in various ways. In the UK a system known as repayment mortgage works on the basis that the borrower will make regular payments on the capital, as well as paying the monthly interest over an agreed term to the mortgage lender.

The time period over which a UK mortgage can be paid varies according to the size of the loan, a payment plan over 25 to 30 years is most common.

The ratio of capital to interest paid within a single monthly payment varies over the term of the mortgage. It is common for the monthly payment to consist of less capital repayment and more interest in the early stages of loan repayment, with a reversed trend later in the term. The aim of this is to ensure the ability of the borrower to settle the mortgage by a pre-set date. Thus, by making regular payments according to this scheme a borrower is assured that the debt will be settled by a specific date. For more detailed analysis of mortgage repayments it is important to know current mortgage rates and to understand the different mortgage rate options.


Author: Marius Bezuidenhout
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No Deposit Home Loan

A no deposit home loan is now available in Australia to assist new home buyers priced out of the market through the difficulty of saving an adequate deposit. The old standard was that you had to save at least 5per cent of the purchase price, plus have more to pay for the other costs like legal fees, Bank, and Government charges.

Not any more. Banks and lenders have come to the aid of these struggling borrowers with a raft of new products including a no deposit home loan.

The no deposit home loan needs to be explained in a little more detail however, before you get too excited. The fact remains that you will probably still have to have some savings, but with the assistance of the First Home Owners Grant, it all becomes much easier.

Let’s take some examples. Say you are looking to buy a home valued at $400,000 or $300000. Now, for borrowers wanting to borrow the maximum 100%, the costs would be as follows. Please bear in mind that Stamp Duties vary from State to State and the following applies to Queensland first home buyers only. All figures are approximate and have been rounded, and not to be interpreted as a binding quote or advice:

Purchase Price $400000
Purchase Stamp Duty $ 2800
Legals (approx) $ 1500
Mortgage Stamp Duty $ 1271
Lenders Mortgage Insurance $ 10545
Govt Transfers $ 634
Registration fees $ 112
TOTAL $416862

OR

Purchase Price $300000
Purchase Stamp Duty $ NIL
Legals (approx) $ 1500
Mortgage Stamp Duty $ 860
Lenders Mortgage Insurance $ 6126
Govt Transfers $ 396
Registration fees $ 112
TOTAL $308994

So, the ‘real’ price you pay for your new $400000 home is actually closer to $416900. So where will your money come from?

The no deposit home loan means the bank will advance you $400,000. The First Home Owners Grant will give you $7000 which means you will have to find about $10,000 of your own money. Some people choose to borrow this from parents, family or as a personal bank loan.

In the case of a $300000 purchase, the figures are different. In this scenario, the ‘real’ cost is $309000. With a no deposit home loan of $300000 and the First Home Owners Grant of $7000, you will only have to save $2000.

After you have taken care of the cash side all that’s left is to satisfy the bank that you can repay the loan and away you go!

Remember that each bank has their own special criteria for assessing loans and you can expect to find wide variance in how much they will lend you. You need access to special software to get the comparisons right, and to make sure you get the loan options you require to suit your personal circumstances.


Author: Michael Haydon
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About Home Equity Loans

Home equity loans are available for homeowners or property owners. This is the kind of loan where the homeowner uses his property as collateral or a guarantee that the loan will be repaid. As such, it is a form of secured debt. If the borrower defaults on the loan, he loses his house and may be forced to move. The home equity loan is based on the amount of equity the owner has in the property. Equity refers to the amount of the principal that has been repaid on the mortgage, if there was a small down payment. It is the amount of value that is not mortgaged (appraised value of the home less the principal remaining of the mortgage). The greater the amount of equity the home owner has, the larger the amount of money he can borrow using the home as collateral.

There are advantages and disadvantages of home equity loans. First of all, it is usually a way of borrowing at a low interest and is available to any home owner with a good credit history. The lender looks at the debt-to-income ratio in determining eligibility. The big advantage for the borrower is that he can use the borrowed funds in any way he wants. He does not have to give a reason for borrowing or an account of how the borrowed funds are used. This is why home equity loans are so popular. In many instances, homeowners use home equity loans as a form of debt consolidation. Instead of having bills coming in at different times of the month with different due dates and different interest rates, they have one monthly payment at one interest rate. (The problem here is that they are turning short-term unsecured debt, like credit cards, into long-term secured debt.) Finally, depending on the borrower's situation, the interest on the home equity loan may be tax deductible.

The disadvantages of the home equity loan are that the size of the loan is limited by the amount of equity the homeowner has. For someone who is just beginning to repay their mortgage and has made the first few payments, they have very little, or no equity and cannot get a loan, unless they made a sizeable down payment on the house. The other drawback is the house is being used for collateral for the loan. If there is a default, the homeowner loses his house.

Home equity loans are attractive to the public because they are relatively easy for the homeowner to obtain. Since the home is used as collateral, the approval time for the loan is rather short, usually a few days and they don't have give a reason for wanting the loan. Home owners can obtain these loans in a variety of places. They can check with their own bank and other banks and lending companies. There are also many online lending companies and banks that provide home equity loans.


Author: Jill Kane
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