CD Rates (Certificate of Deposit Rates) and High Interest Savings Accounts » mortgage http://bankingtopia.com Get great information on CD Rates (Certificate of Deposit Rates) and other High Interest Savings Accounts. Fri, 07 Jan 2011 23:28:02 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Mortgage Companies Bad Loans http://bankingtopia.com/mortgage-companies-bad-loans/ http://bankingtopia.com/mortgage-companies-bad-loans/#comments Mon, 03 Nov 2008 23:05:41 +0000 Bankingtopia Editor http://bankingtopia.com/?p=125 You know what’s great about this country? Even if you smoked pot all through high school, graduated with a D average, didn’t get into college, knocked up your girlfriend at 18, and spent the last nine years selling shoes at a strip mall making $8 an hour, you can still get a $300,000 home mortgage. Well, at least you used to be able to, but that was before the economy finally gave out under the weight of thousands of defaulted home loans. It might be slightly more difficult to get that loan now. Sorry to get your hopes up.

Whose bright idea was that anyway? Seriously, which mortgage company was the first to decide that it would be a great idea to give vast sums of money to minimum-wage service monkeys with no savings, no education, and no collateral (aside from their ultra rare Pokémon card collection)? Is it really that much of a stretch to imagine that a person who can hardly afford to rent an apartment would be unable to make payments on their four bedroom, 2,500 square foot Barbie dream house? Why did nobody see this coming?

Here’s one possible reason: If you’re in your 20s, foreclosure and bankruptcy aren’t really that scary. Sure, your credit will be ruined for awhile, but after 10 years (max), those records will be stricken from your credit score and you’ll be back to maxing out your shiny new credit cards. In the meantime, you’re free from your debts and can live happily in a tiny apartment off of your weekly paycheck, playing video games and eating Doritos. Isn’t a consequence-free life grand?

It’s not all your fault though, right? Of course not. That mean old bank didn’t explain the concept of a floating mortgage to you, did they? No, you just took their word when they told you that a 2% interest rate now would be better than a 6% rate always. It’s a shame that you never did a simple Google search to see what “floating mortgage” meant. Yes, I’m sure that 2% interest rate was nice, and that with it you could just barely afford your monthly payments, but what happened after that 2% floated on up to 11%? Oops, bet you didn’t see that one coming.

Consumers only have to bear part of the blame though. For the last few years, banks and lenders have been practicing absolutely predatory lending methods, some of which boil down to nothing more than pyramid scams. Remember all of that “refinance your home” crap a few years back? Interest rates dropped, so tens of thousands of Americans abandoned their old mortgages and refinanced with slightly lower interest rates. For some, this was a smart move. For others, those shining stars who ditched their fixed-rate mortgage for a low floating mortgage, well, they should have done their research. Who could blame them though? Interest rates kept dropping, and banks kept telling them that they could always just refinance lower and lower, and that the free money would just keep pouring in.

The key thing about a home, though, is that they’re only worth what someone else is willing to pay for them. Sure, the bank may have told you that your house will have appreciated $30,000 in value by the time you’ve paid off you loan, but I’m sure that they told you that in good faith, not because they were trying to get you to sign your loan papers. Too bad you never took a basic economics class. If you had, you might have learned of a little concept called “supply and demand”. I’ll sum it up in simple terms: When the supply of homes is enormous, people will demand them at a low price. In other words, when thousands of people found themselves unable to make their mortgage payments (remember those pesky floating mortgages?) and listed their houses for sale, nobody wanted to pay the ridiculous prices being demanded. Thus, homes were seized, bankruptcy ensued, and the stock market crashed.

]]> http://bankingtopia.com/mortgage-companies-bad-loans/feed/ 9 Home Equity Loans http://bankingtopia.com/home-equity-loans/ http://bankingtopia.com/home-equity-loans/#comments Tue, 28 Oct 2008 08:28:59 +0000 Bankingtopia Editor http://bankingtopia.com/?p=72 One good loan to look into when buying a house is called a home equity loan. These loans are nice because it lets you borrow money against the house you are trying to buy. This loan is used to buy homes in need of minor home repairs so usually, you can get the loan on a fixer upper for a really good deal and then turn around and get money to fix it up so you can get more equity into your house right away. All of this has to be done when the original loan is signed and if you do decide to borrow against the house right away, it will deplete the overall value of the house for now. Once the loan is paid off, the value of the house will go back up so you will not have to worry about that.

With the home equity loans it also allows you to refinance your existing loan to see if you can get a better interest rate, and most often you can get a better rate saving you some money per month and less time overall to pay it off. You can also deduct this type of loan on your personal taxes if you live in the US. Two types of second mortgages exist on the second mortgage, a market-open loan and a closed end loan. A market-open loan is basically is the same as the first mortgage, same criteria and everything. The other type, closed end mortgage loan, you can get a large lump sum of money when you sign the papers at closing time. If you decide to go with the closed end loan, you can no longer borrow money against the house until you pay it off in full.

If you are going to refinance you house be careful a d decide what second mortgage you want. If you know one will work best for you then take that option because you dont want to cause more problems later down the road for you and your family.

]]> http://bankingtopia.com/home-equity-loans/feed/ 0 Getting A Mortgage With Bad Credit http://bankingtopia.com/getting-a-mortgage-with-bad-credit/ http://bankingtopia.com/getting-a-mortgage-with-bad-credit/#comments Tue, 28 Oct 2008 08:21:50 +0000 Bankingtopia Editor http://bankingtopia.com/?p=70 Everyone needs a place to lay their head at night when coming home from work and why should bad credit stop you from being able to do just that? Well, it doesnt have to be that way as long as you do your homework when you are getting the loan you need for your house. Yes, you have bad credit, but you can still get the house of your dreams, you will just be paying more in fees then someone with good credit would be paying but the house will be yours.

The best way to make sure your home loan goes through is to try to fix your credit by paying off some bills in an effort to make your credit report a bit healthier. If you have time try to pay off some of your bills before you apply for the home loan. By doing this, you can show the lender that you are making a conscious effort in trying to make your credit better. Find out what your credit score is and see if you can raise it up or what you have to do to raise the score to improve your chances of being able to qualify for a mortgage. The higher your credit score is, the easier it is to get the loan you need to get the house you want to purchase. The most important thing when you are looking to get a mortgage is to make sure all of your previous loans and bills are paid on time and dont max out your credit cards to pay off your bills because it will just hurt you in the long run.

If you dont have that much time to get all of your financial obligations in order, dont worry you can still get the loan, it will just be a higher interest rate. The nice thing about that is you will not have to pay a high interest rate forever because once you make payments and the payments are being made on time over a set period of time, you have the opportunity to refinance your mortgage to get a lower interest rate which will help you out so you are not paying so much. It will actually seem like you are having more money to do other things. Plus, by doing this, your credit rating will start to go up, showing you are on your way to fixing your credit score.

The best way to go, if you have a bad credit score, is to go to a mortgage broker or look online for companies to give you quotes for a home mortgage. If you choose a mortgage broker, they will be able to answer all of your questions you might have right there and they can offer some helpful hints on how to obtain the best loan for your situation.. Online, the application is right there and normally, if you have questions, you can often find that many websites offer live help at just a click of a button. Either way, no matter what you decide to do, you can still get the house you want, you will just have to work a little harder for it.

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