Posts tagged: home loans

A Guide To Getting A Mortgage When You’ve Got Bad Credit

mortgage for youIf you’re wanting to purchase a home, but have missed paying a few mobile phone bills or have been bankrupt, you may think that you’ve got no chance. Although it’s certainly difficult to get a loan when you have a bad credit score, it’s definitely not impossible. Getting a mortgage with bad credit isn’t easy, but that doesn’t mean you should just give up. Here are a few options for you to consider before throwing in the towel.

Increase Your Credit Score

If you have a bit of time before you actually want to put down a down payment, then you should definitely consider trying to raise your credit score. This will mean that not only will you find it much easier to secure a mortgage, but you will also generally have to pay less money in the long run, as the interest won’t be as high. Checking your credit report for mistakes is one possible way to do this, as you could have been a victim of fraud in the past. Ensuring that you’re on the electoral roll is also important, as you are unlikely to be accepted for any kind of credit unless you have this as proof that you are who you claim to be and live where you claim to live.

Increase Your Down Payment

Whether you have a bad credit score or not, mortgage lenders are much more likely to approve you for a mortgage if you provide a down payment that is much larger than usual. If you have some extra money saved somewhere, whether this be in a savings account or under your mattress, then you are halfway there. If not, then you need to find a way of securing these funds. Asking family and friends is a possibility, but isn’t always an option. Even if it is possible, you may not want to ask for large amounts of money from your loved ones. Here is when you need to start thinking about a bad credit personal loan. What are personal loans for people with bad credit? Well, they’re exactly what they say on the tin. A bad credit personal loan is there to help people with bad credit secure a personal loan, for things such as making a down payment on a new house.

Have Some HOPE

If you don’t have a large enough income to make a big down payment, then the HOPE program is something you may want to consider. Hope will allow borrowers with bad credit get approved for loans, sometimes with as little as a 0% down payment. This is a great option for someone on a low income, with bad credit, as it will help you to improve your credit history when you start to make your repayments.

Buying your own home, even with a bad credit score, is definitely not impossible. You do need to do a lot more research, and often have to pay more than others with a better credit score, but it will all be worth it when you’re falling asleep in a house that you own.

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Second Property: What to Do Before Making the Investment

invest on propertyFor many people who have the funds available, buying a second property is the ideal way to channel their money effectively. But before you get swept away with the amount of rental money that will provide a boost to your earnings or the funds that you will make from renovating it, you should think about all the other costs and factors that are not so apparent. To give you a helping hand, here are a few of the main things that you should consider before taking the plunge and buying that property.

Create a Clear Plan

First of all, you need to have a clear idea in your mind about what you are actually going to do with the property as this will massively influence your overall decision. If you are planning on renting it, you need to choose a place that is an attractive place to live for your target renters – whether they are students, young professionals or families. If you are planning on selling the place, you need to carefully do your sums so you identify a property that can be renovated for a good cost, while still providing you with a healthy return on your investment.

Select a Good Location

Just like choosing your own house to live in, location is everything. We have already talked about how this could affect renters, but you also need to consider how easy it is to get to your new home. This is especially important if you are planning on taking a ‘hands on’ role in the rental or development. If this is not the case, it may not be so much of an issue, but you still need to choose a location that is going to be appealing for people. Also, consider whether you will be buying land with the property as well – check out this guide for more info about house and land packages. Consider all factors including public transport links, proximity to schools and other facilities and the type of neighbourhood it is.

Budget for Unforeseen Costs

Any sort of big investment like this has the potential for unforeseen costs. Aside from the mortgage and taxes, you should also think about maintenance costs, which will play a major role regardless of whether you are planning on renting the place out or selling it on. Decoration and repair bills should all be factored in as well. Many first-time investors fall into the trap of underestimating how much it will be to get their new property up to code, so make sure that this doesn’t happen to you.

Plan Your Involvement

Decide whether you will be heavily involved in all aspects of the project or whether you will be leaving the job to external agencies. If it is the latter, you need to make sure that you choose some organisations that you trust to handle any issues along the way. Personal recommendations are always going to be the best way of ensuring you have the right people for the job. Each approach has its pros and cons, so make sure that you are fully aware of all of these before committing either way.

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Exploring Your Options For Buying Property

property buying optionsThere are many reasons to consider buying a property. You might want somewhere to live that you can call your own? Perhaps you see real estate or owning a property as a status symbol. Maybe you’re just trying to collect assets? Regardless of your priority needs, any purchase worth as much as a property must be considered a financial investment. That means you must assess the risks of loss, and research to determine the potential growth or increased worth.

There are many steps you need to take before you can finally pick up the keys and let yourself in. Each of those steps might be a factor in your final decision or your reason for buying the property you chose. They might also be a reason for changing your mind too!

Time

The first consideration is time. How long do you have before you need to complete the sale? If you’re not in a rush, then you might decide to save up as much cash as possible before property hunting. The more you have upfront, the less you have to borrow. This increases the profit you can make on your property investment because you are not being charged as much interest on a smaller loan.

If you don’t have much time, then you need to find the money to cover the cost of the property. There are many other costs involved with buying real estate too. The legal costs and survey costs are just some of the expenses you need to cover up front. There are likely to be taxes, and you might incur moving fees if you plan to live in your new property. If you can spare more time, you can save more to cover each of these costs.

Financing

Financing your purchase is easy if you have a great credit rating. In fact, there are many mortgage lenders that are desperate to lend to people that have a good rating. Buy-to-let mortgages are plentiful too. If you have a substantial deposit, you might be eligible for a mortgage product that is low interest. If you’re not quite so financially ‘viable’, then financing in this way can become expensive.

Many ‘millennials’ are finding it necessary to approach the bank of mom and dad to fund the deposit. As salaries for this age group are quite low, it is essential to find quite a significant deposit. The deposit is the sum that is outstanding after the mortgage has paid for the property. The lender will expect to see that you have that outstanding amount (usually a minimum of ten percent of the purchase price) before paying the loan out.

If you are planning to become a property investor or a landlord, you might be able to develop a relationship with a business investor in this sector. This will become a legally binding business relationship in many cases. There will be responsibilities and obligations that you will need to meet. This is not usually the right option if you’re trying to buy a home.

Other Options For Raising Cash

You might already have a home that you need to sell first. This puts you in a ‘chain’ and can be difficult to coordinate. However, selling your current property may release a lot of equity so that you can buy another home. You don’t need to limit yourself to selling property to raise money for a deposit or purchase. Anything you don’t need could be sold privately or through an agent to help you raise more cash.

Your employer might also help you out with a loan or an advance. Usually, loans must be declared on your mortgage application. This might not appear favorably to any lender. Why not take some overtime, or ask for a pay rise? Changing jobs or taking a second job can also help you to raise the cash you need.

Sharing ownership of the property can also help you out financially. Legally, you are both responsible for mortgage repayments. If one of you stops paying for any reason, the other must cover the entire bill in most cases. Speak to your lawyer about this kind of arrangement and the potential consequences of non-payment.

Searching For The Right Property

Once the money is agreed, you can start searching for a property within your budget. You might already have some idea of the type of property you want. However, if you’re willing to be flexible, you might be able to secure a place with the most important requirements. You might be looking for four bedrooms, but your first choice of neighborhood means that is not affordable. You would need to reduce the bedrooms or pick a different community.

If you’re investing in property, you don’t need to restrict yourself to your local neighborhood at all. You could purchase overseas in areas that are up-and-coming. A big property search service like the one at http://rumahdijual.com/properti-dijual could help you to find something affordable. Of course, after the exchange rate, you might find you can afford incredible properties. Maybe large houses or mansions are affordable for you when you look overseas.

Whether you buy here or further afield, the purpose of your purchase must be clear in your mind. Consider your lifestyle and how the property you choose might affect that. If you’re buying as an investment, then a great deal of research on the community is essential. Look at sales data and the demographic of the region. Determine the type of person that will be interested in your property so you can strategize your marketing efforts.

Houses

Buying houses might be a little easier than other types of property. Land boundaries and rights to that plot are usually much simpler too. It’s unlikely you’ll be sharing any part of the property with others. This can make it easier to sell on when you’re ready. Of course, houses can be subdivided. You can rent out individual rooms or convert the property into flats.

Often, houses appeal to families. If you purchase a property that needs a little care and attention, you might be able to do the work then sell it on to a family in need of a good quality property. Alternatively, why not rent it out? Properties of multiple occupancies tend to net more profit and a higher rent in total, though.

Apartments

Apartments in the city can be very attractive to career driven singles and couples. However, the location of the property can drive the prices up. Nobody likes commuting, so many apartments are purchased or rented for mid-week living close to work. This means that you could tap into this market with your next property investment.

There are several things to consider though. There will be fees or rent to pay for the communal areas when you buy a property in a block. Empty apartments are rarely exempt. Access will be required periodically by the building owner. This could be for maintenance and testing of the block safety facilities like fire alarms. Ultimately, you have no land that is your own. The value of the bricks, therefore, may not appreciate as much as you would like.

For You, Your Portfolio, Or Business?

Once you’ve considered all of the above, you’re probably ready to make the final decision about the purpose of your purchase. Are you buying a home for yourself? If so, how long do you intend to live there? If the property is a forever home, do you intend to leave it to the kids as an inheritance, or sell it to fund your later-life care?

Perhaps this property will be part of a big portfolio you intend to develop over time? Maybe it’s the first one! Are you going to rent it out, or do it up and sell it on? Perhaps you’ll sit on it for a few years and wait for the value to go up? How will you start to reap a return on your investment in the meantime?

If you’re buying for business, then you need to consider the purpose of the property or the land it sits upon. You might be keen to develop the area. This might include demolition and rebuilding. Or maybe you’re converting or renovating the buildings on the land? Check the legal and planning restrictions on the real estate before buying.

The Process Of Buying

Buying a property takes a long time. Once you’ve found the one you want, you put in an offer to the vendor. They might go away for a few days to consider your offer. Even if it is agreed, you then need to find legal representation and finalize your financing. Surveys and checks can take weeks. If anything is found that your lender doesn’t like, you might have to start a new application with another lender.

At any point, the sale can fall through. There may be delays with other purchases and sales in the chain. Until the keys are in your hand, nothing is certain. It can be a bit of a waiting game. Of course, once the property is yours, it may be a long wait to see any return on your investment. Are you ready to buy a property?

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Buying A House: The Unforeseen Costs

hidden home buying costsBuying a home is one of the most monumental moments of any adult’s life. It is the chance for a new start, to take control of your lifestyle and independence, and have the opportunity to start a family with the one you love. On the flip side, buying a house can be the most stressful, time-consuming and costly affairs of your life.

We all know about the major costs of purchasing a property, with the deposit and the mortgage, as well as forking out for furniture for your new home at the top of the list. But there are some unforeseen costs which nobody tells you about until you are already part-way through the process, today we are going to take a look at these hidden costs. It might make you have to rethink whether you can afford to put an offer on the house right now. If you are worried about the down payment on a house, you can always check out this article to let you know how much you should pay.

Attorney’s Fees

The first kicker when it comes to buying a house is the attorney’s fees. You will have already searched for a home, gone for viewings, put an offer in and been accepted before these charges become apparent. It all depends on where you go. There are tonnes of lawyers to go to when you are looking to buy a property, and the fees are relatively standard. However, you can still shop around to find the lowest cost if you like, however, sometimes the lower price is reflected in the service you receive. Consider asking friends and family who they chose and work from there. You may find that the result is a little more pricey, but if you can work with a company that is trustworthy, it is worth the extra cash.

Home Buyer’s Report

When you apply for a mortgage, the lender will ask you to complete a home buyer’s report to check the house for any faults and damage. If the home you are looking to purchase fails the report, the house cannot legally be sold, and you will have to find something else. Although it is an annoyance, it’s in your best interests to have this because it prevents you from buying a damaged property and having to pay out for repairs.

Repairs

If the home buyer’s report passes but comes back with a few minor faults, these are extra costs you will have to consider once you move in. You may have to replace the boiler, make sure windows are double glazed, or tile the roof, which will add to your expenses.

If you don’t opt for a full survey to be carried out, once you move into the property you may be faced with repairs that you weren’t aware of previously. For this reason, it is recommended to get a full survey on any house over 100 years old. If not, you can opt for a slightly less in-depth survey which will still give you information about the inside of the property.

Stamp Duty

Stamp Duty is one of those niggling little costs that only creep up when you receive your contract. Stamp Duty is land tax, which everyone has to pay on their property upon purchase. The tax will range depending on the size and location of the house but is worked out as a percentage of the value of your home. You can calculate it here.

Home Insurance

Home Insurance must be put into place from the data you exchange contracts, meaning that even if you don;t move in on your exchange date, you are already paying home insurance on your property. Paying for your home insurance ahead of moving in is a minor annoyance, however, is essential to secure the safety of your home.

Temporary Accommodation

If you aren’t lucky enough to be living with parents or friends as you go through the moving process, you must think about the cost of your current accommodation. Whether that be your current mortgage or rent, it can eat away at your savings.

Storage Costs

Many people like to start building a collection of items for when they move into a home. You could be beginning to stock up on furniture, appliances, kitchen utensils or towels- but you will need somewhere to store them all. Hiring out a storage unit is a great way to relieve the stress of moving everything from one property to the next, because it will all be in one single location ready to go. However, if you face unforeseen difficulties with your purchase which slow down the process, such as probate or environmental issues, you may have to hire out the unit for a longer period.

Moving Costs

Finally, the day has come where you’ve got the keys to your new home, and you can begin to move everything in. Unless you or a family member have a van you can borrow, you may have to fork out for a moving truck or rent a van for a couple of days to move everything into your home. It can be a long process, but once you have settled, it’s worth it. Shop around to find the best value hire companies in your area.

Random House Costs

Once you’ve moved into your new property, you will be faced with some bills. You will have a few different costs to think about when setting up your home. First up, electricity, gas, and water. Usually, when you take on a property from its previous owner, you can simply transfer the existing setup to yourself- freeing up some time trying to hunt for a new deal. You can, of course, set up your own, and this will involve comparing companies and packages with what suits you. The same goes for broadband, tv, and phones. You may want to set up a package deal with all of these thing included at a discounted rate. It’s up to your personal preference and needs.

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The Changing Face Of Property Investment

global property investmentsProperty is one of those things that is seemingly always cited as a great opportunity for investment. Housing, after all, is one of those things for which there will always be a demand. The President of the United States demonstrated over the course of his career that with a small loan (of a million dollars no less) that one can become a billionaire. However, scrutiny of these claims suggests that Donald Trump did not use his ingenuity and hard work to build the empire that he ostensibly relinquished control of when he took office earlier this year. The fact is that Trump simply did not have the connections or the capital to finance some of the projects that started his career as a developer. This demonstrates that the market can be tough when you are starting out. As a point in fact, Trump declared bankruptcy four times in 1991 and 1992 alone, with a further two bankruptcies, in 2004, and most recently, in 2009. A lot of people will not have the contacts to start building hotels in Manhattan when they are in their twenties. However, there is nothing wrong with slowly and honestly building a portfolio that modestly begins with a single property. Deciding exactly what property that should be is the difficult part.

The first and most important step to investing in property though is the initial financing that you need to source to get your start. If your father is not an immensely wealthy real estate developer, you will probably need to look to banks or other lenders to help you out. Trying to get a mortgage for an investment is different to seeking one so that you can buy the house in which you intend to live. The checks that will be carried out will be more precise, and you will need to provide detailed business plans before you can expect to be met with approval. You also need to worry about the fundamentals. If your credit rating is not as good as it could be, you may want to think about waiting a while before trying to start a portfolio. There are lots of ways to improve your credit rating like paying off your existing debts and demonstrating an ability to effectively and quickly paying off your future ones. However, until this is done, a new venture may be unnecessarily risky. Something as simple as registering on the electoral roll in your area could increase the chances of being accepted for a loan. The fact remains that when you take on a loan, you become personally liable for paying that money back with interest. If your investment fails or does not give you as great a return as you’d hoped, you could be in a particularly difficult financial situation. It is, therefore, crucial that you carefully consider each investment on its merits before taking on such a massive responsibility. You would not be the first person to bankrupt themselves as a result of ambition.

However, if you are pretty sure that you have enough money to make a move in the markets, and you will have enough left over in case it fails, you need to start looking for different types of property in which to invest. One option, and perhaps the most common, is buying residential properties to sell or rent. One particularly lucrative option is student property investment. Students often get loans to support them while they are at college and not able to work full time. They will, therefore, have the money to pay for accommodation, which, after all, is a necessity. It is a good idea to think about investing in student properties because there will always be a constant supply of new students. Each year, a group will graduate, but a new group will join to replace them. However, it is not just students that represent a good target demographic for rental properties. Millennials are now being described as Generation Rent. A lot of young people grew up or left college during the economic downturn that started in 2008. They have struggled to find jobs that pay well enough for them to be able to start thinking about a mortgage. In fact, a study conducted last year found that the share of 18 to 34-year-olds who own their own homes has fallen to a thirty year low. These people have no other recourse but to rent. If you own rental properties, you could claim your stake of a massive and expanding market. If you invest money in affordable, safe, amenable housing, you could attract lots of potential tenants who are still striving to start their careers and develop some sort of financial certainty and independence. The reality is that a lot of buy to rent properties are not that expensive and with such demand, getting a loan should not be too hard since you can prove the viability of your plan.

The issue of gentrification is one of which you should be aware of though. In the United States, perhaps the most obvious recent example is the change that has taken place in Brooklyn. Whereas areas like Greenpoint were once home to mostly immigrant communities, Brooklyn now has rents that are comparable to Manhattan because so-called ‘hipsters’ started to move to these areas. They become fashionable, and the rent went up as a result. It is a simple economic model. If a landlord realizes that their property suddenly has more value, they will charge more for it to take advantage. This sort of social change has been harshly criticized in the past because many areas lose the identity that they once had. The small, independent stores and businesses that allowed the local people to survive are replaced by chains and major corporations, therefore outsourcing the profits too. However, if you buy lots of property in an area that you anticipate will become gentrified, you could make immense amounts of money. The only problem is that it is quite difficult to anticipate where people will want to live next. Knowing that is the secret to making good investments.

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