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Monday, 3 December 2012

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home finance Bankruptcy Can Get You Good Deals for Home Financing

Many people normally refrain from filing bankruptcy despite facing the reality of it to be able to avoid having a bad financial record. Not knowing that this can be used to their advantage in starting anew ? like in looking for a new home. Just after 6 months of bankruptcy, you can already do loan transactions with lenders without any association to your being bankrupt. A seller financing scheme will also be made available to you without checking your credit thus closing the deal faster with flexible payments and low interest rates.

Dealing with home financing facilities is better than getting a personal loan when buying a house. This way, you can consider your amortization as an investment. Once you?ve created a good credit standing by paying on time, you can already get a traditional loan for home improvements or buying a better house. Here is what you should do:

  1. Save up for the down payment. The bigger you can accumulate, the better it would be so you will not be so burdened with a big amount for monthly amortization. This will also lower down the interest expense you incur. A bigger loan availed can make you incur bigger interest expense.
  2. Determine a budget you can afford for monthly amortization. It should not be over 30% of your monthly income or you will be on deficit spending. Living expenses is quite high these days and the remaining 70% should be budgeted to include expenses for education if you have children in school. As much as possible allocate an amount for your monthly savings.
  3. Choose the house that matches your family?s needs and your budget. Should your budget allow only for a two bedroom house then be it. Later on when there is extra income and savings, you can always do home improvements.

A mortgage occurs when an owner pledges his or her interest as security or collateral for a loan. And so a mortgage is an encumbrance on the right to the property. As most mortgages occur as a condition for new loan money, the word mortgage has become the generic term for a loan secured by such real property. As with other types of loans, mortgages have an interest rate and are scheduled to amortize over a set period of time between 10 to 30 years. All types of real property can be secured with a mortgage and bear an interest rate that is supposed to reflect the lender?s risk.

Types of Mortgage Loans:

There are different types of mortgages used worldwide. Several factors define the characteristics of the mortgage. Though these are subject to local regulations and legal requirements:

  • Interest may be fixed for the life of the loan or variable, and change at certain pre-defined periods. It could be higher or lower.
  • Mortgage loans generally have a maximum term which means the number of years after which an amortizing loan will be repaid. Some mortgage loans may have no amortizations set but require full repayment of any remaining balance at a certain date.
  • The amount paid per period and the frequency of payments may change or the borrower may have the option to increase or decrease the amount paid.
  • Some types of mortgages may limit or restrict prepayment of all or a portion of the loan.

The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM) also known as a floating rate or variable rate mortgage. In some countries such as the United States, fixed rates are the most availed. Combinations of fixed and floating rate mortgages are also common where a mortgage loan will have a fixed rate for some period for the first five years for instance and vary after the end of that period.Don?t lose your chances of regaining your financial stability by limiting yourself with personal loans only for your new home due to bad credit history. Explore the strategies of financial institutions to suit the changing economic situation.

 Bankruptcy Can Get You Good Deals for Home FinancingAbout Mackenzie Salis ?(2 Posts)

Mackenzie Salis is a finance writer for 3 years. She is the author of the site: OnlinePaydayLoansGuide that can provide all valuable information about loans and warn you against fraud and swindle.

Related posts:

  1. Do You Know When its the Right Time to Refinance Your Home?
  2. Is ?Buy to Let? the option for you?
  3. Why You Should Refinance Your Mortgage to a Shorter Term
  4. Making Your Home Affordable
  5. Types of Mortgages?And How and When to Get Them

Source: http://www.richescorner.com/bankruptcy-can-get-you-good-deals-for-home-financing/

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