It is understandable that many believe low credit scores effectively ensure dreams of buying your own home are binned. It seems illogical any mortgage provider would entrust the task of repaying hundreds of thousands of dollars to anyone with a poor credit history. But actually, it is possible to get home loans with bad credit.
The biggest problem is not the particular credit rating an applicant has, but the ability to repay each month and the debt-to-income ratio that dictates what is affordable. These are the issues to worry about, before factoring in fast mortgage approval and other apparent advantages.
But how can a bad credit borrower qualify for a home loan? And what are the typical terms that they need to accept? And depending on who they secure it from, are these the best mortgages available for the savings and flexibility they can enjoy.
Qualifying for a Home Loan
The criteria required to get a home loan with bad credit is not a million miles from those necessary to secure a mortgage with excellent credit. The basic requirements are to be over 18, have a full-time job and be a US citizen (or legal long-term resident).
Without meeting these criteria, applicants have no chance of securing approval at all. The second stage of the process involves the assessment of income and employment status, and most importantly, how much money is available to commit to repayments. These determine whether fast mortgage approval can be secured or not.
Of course, fast approval is not overnight. Normally, a home loan is processed over 90 days, so fast is considered anywhere between 30 and 60 days. If everything is in order, and clearly displayed, then mortgage providers may give the green light in that time.
Terms to Accept
Having a less-than-perfect credit score means the terms of any loan are not going to be ideal. So, when seeking a home loan with bad credit scores to your name, expect higher interest rates and less flexible repayment schedules. Unfortunately, this is detrimental to the affordability of the mortgage.
However, there are choices. Interest rates come as fixed or variable, and the combination of both can help to make the deal more affordable. And, while it may not be especially fast, mortgage approval can at least be very likely when the loan term is longer, thus reducing the size of the monthly repayments.
The debt-to-income ratio is the key, with its 40:60 rate meaning only 40% of available income can be committed to repaying the home loan. So, even with ,000 excess income to hand, the repayments can be no more than 0 per month. Lowering existing debts and increasing credit scores can improve the ratio.
Advantages to Look Forward To
So why bother improving scores and clearing debts in advance of taking on a huge debt? Well, anyone who has ever wanted to own their own home can answer that question. Securing a home loan with bad credit is not easy, so any opportunity to help make it possible to buy affordably is worth seizing.
These mortgages were introduced to allow bad credit borrowers buy their homes, but also to ensure the property market did not collapse completely. So, there are advantages to be enjoyed, even if fast mortgage approval is a matter of 60 days.
If nothing else, adhering to the repayment schedule causes considerable improvement to credit scores, thus helping the borrower towards a financial recovery. So, a home loan, even if the terms are not ideal, can be worth the commitment in the long run.
Showing posts with label Home. Show all posts
Showing posts with label Home. Show all posts
Wednesday, February 27, 2013
Friday, February 22, 2013
Va Home Loan With Bad Credit: What Is Needed To Secure Approval
Even for those who have served their country, there are no guarantees when it comes to buying a home. When bad credit ratings are part of the equation, it can seem almost impossible to purchase the home we want. Luckily, however, it is easier to get the green light on a VA home loan with bad credit than from any normal mortgage provider.
This is good news, but there is no such thing as free money. Satisfying lender criteria is always necessary, but especially when seeking approval despite a low credit rating.
But as long as finances are in relatively good order and proof of service in the armed forces is provided, there is little trouble in qualifying for consideration. And then, once the boxes are ticked, the chances of securing the VA home loan is strong.
Key Qualifying Criteria
Like every other kind of loan, getting a VA home loan with bad credit comes down to satisfying the qualifying criteria that the lender lays down. When it comes to the VA, there are a number of criteria that extend beyond the normal income related conditions.
Obviously, an applicant needs to be either a current or a former member of the military. That includes, not only the armed forces, but also if time was served in the National Guard or even as a reservist. Getting approval despite a low credit rating is possible if there is proof of no late loan repayments or bankruptcy within a certain period.
Another condition is that the property to be bought with the VA home loan is to be a primary residence of the home buyer. So, someone seeking to buy a summer home or to buy property for renting purposes cannot qualify.
Income and Repayment
Of course, the basic condition for any loan is proof of a regular income. Although there are plenty of benefits available for anyone seeking a VA home loan with bad credit, it is just as important for an applicant to prove they are gainfully employed. This usually means providing confirmation with pay slips or a bank account history.
However, this is only half the requirement. It is also necessary to show an ability to meet the repayments each month, and this is a little tricker to do. The debt-to-income ratio is used to calculate this, with lenders not allowing the ratio to exceed 40:60. This means that, to get approval despite a low credit rating, it is necessary to show no more than 40% of the available income is taken up by debt repayments.
It is possible to qualify for a VA home loan if the existing obligations are low enough to ensure a healthy ratio exists. However, if the debt is too much, the application is set to be rejected.
Finding a Lender
It is important to note that, while getting a VA home loan with bad credit is a lot more likely than a normal mortgage, applications are not made to the VA itself. Instead, it is necessary to go to mortgage provider, who will then submit the application to the VA on your behalf. The idea is that much of the paperwork is then kept out of the hands of the VA.
In any case, the benefits to be enjoyed extend to a quarter of the amount borrowed being secured by the VA, thereby allowing the interest rate to be lowered and removing any need for a down payment. Of course, this makes it easier to get approval despite a low credit rating.
However, it is necessary to find a lender with good terms first, and convincing them to approve the application is the first stage to getting a VA home loan. So, choose the lender carefully.
This is good news, but there is no such thing as free money. Satisfying lender criteria is always necessary, but especially when seeking approval despite a low credit rating.
But as long as finances are in relatively good order and proof of service in the armed forces is provided, there is little trouble in qualifying for consideration. And then, once the boxes are ticked, the chances of securing the VA home loan is strong.
Key Qualifying Criteria
Like every other kind of loan, getting a VA home loan with bad credit comes down to satisfying the qualifying criteria that the lender lays down. When it comes to the VA, there are a number of criteria that extend beyond the normal income related conditions.
Obviously, an applicant needs to be either a current or a former member of the military. That includes, not only the armed forces, but also if time was served in the National Guard or even as a reservist. Getting approval despite a low credit rating is possible if there is proof of no late loan repayments or bankruptcy within a certain period.
Another condition is that the property to be bought with the VA home loan is to be a primary residence of the home buyer. So, someone seeking to buy a summer home or to buy property for renting purposes cannot qualify.
Income and Repayment
Of course, the basic condition for any loan is proof of a regular income. Although there are plenty of benefits available for anyone seeking a VA home loan with bad credit, it is just as important for an applicant to prove they are gainfully employed. This usually means providing confirmation with pay slips or a bank account history.
However, this is only half the requirement. It is also necessary to show an ability to meet the repayments each month, and this is a little tricker to do. The debt-to-income ratio is used to calculate this, with lenders not allowing the ratio to exceed 40:60. This means that, to get approval despite a low credit rating, it is necessary to show no more than 40% of the available income is taken up by debt repayments.
It is possible to qualify for a VA home loan if the existing obligations are low enough to ensure a healthy ratio exists. However, if the debt is too much, the application is set to be rejected.
Finding a Lender
It is important to note that, while getting a VA home loan with bad credit is a lot more likely than a normal mortgage, applications are not made to the VA itself. Instead, it is necessary to go to mortgage provider, who will then submit the application to the VA on your behalf. The idea is that much of the paperwork is then kept out of the hands of the VA.
In any case, the benefits to be enjoyed extend to a quarter of the amount borrowed being secured by the VA, thereby allowing the interest rate to be lowered and removing any need for a down payment. Of course, this makes it easier to get approval despite a low credit rating.
However, it is necessary to find a lender with good terms first, and convincing them to approve the application is the first stage to getting a VA home loan. So, choose the lender carefully.
Wednesday, February 20, 2013
Add Value To Your Home With Great Garage Designs
Garage areas used to be considered an upgrade to your home. A lot of homes in the 1960s and 1970s just simply did not have the space. If a home had a connected garage it was usually a single car garage but more commonly a home could have a carport. Since that time garage designs have improved.
Now most homes that are built, even as early as the mid 80's, ordinarily have at least a two car garage, while some even have as many as three and in some cases four car garages. As you acquire more possessions, such as cars and toys and equipment, you may find your current garage situation insufficient. Adding a detached garage could be a solution to this. Perhaps you do not need the space to keep vehicles or belongings, but you have a hobby or a profession that allows or requires space at home to work. Constructing a detached garage could fill that requirement as well. If you have a loved one who is need of more personal care but the thought of a retirement or convalescent home is undesirable, or you are interested in generating rental income but you do not have the interest or ability to invest in a rental property, a detached garage with a loft or an apartment can be the perfect solution.
There are many different and sensible designs for detached garages available to purchase out on the market nowadays. You are sure to discover a garage design to fit your needs, whether it is to have a single, double, or triple garage, or if you looking for that loft, apartment or workshop you have always wanted. The World Wide Web is one place to easily and quickly find different garage designs to search through. Architect and CAD drafting businesses have come up with dozens of garage plans to suit most needs, and if you have some specific needs that the stock plans do not address, these companies can alter existing plans or custom design one just for you.
It is important to check with the building department of the city or township in which you reside to make sure a detached garage, with or without a living space, meets all zoning requirements. In some locations you could be violating the zoning restrictions by building a detached structure and renting it if the area is zoned for single family houses. You might currently even be in violation and not know it if you have a basement in which you rent out and have not even checked with the zoning of your city.
If your needs require a detached garage and you want to purchase garage designs over the internet, make sure the company from which you buy includes not only the plans but a complete design plan. This package needs to include all the information necessary to meet current building permitting requirements and to allow the contractor you hire to secure correct construction bids. If adjustments to an existing plan are required, the ability to communicate with a draftsman and get a timely response is really important.
Unless you are designing an entire custom garage, make sure you ask the design company about a money-back guarantee. The guarantee should state that if you buy one of their pre-designed garage plans and it does not work on your property, you are qualified to receive a full refund. You should also be given time to review the blueprints once you have them. Three months is adequate to check with your building department and consult with your contractor to make sure the plans are usable. If not, the company should really refund you your money and should work with you to create a design that does work and one with which you will be satisfied.
Now most homes that are built, even as early as the mid 80's, ordinarily have at least a two car garage, while some even have as many as three and in some cases four car garages. As you acquire more possessions, such as cars and toys and equipment, you may find your current garage situation insufficient. Adding a detached garage could be a solution to this. Perhaps you do not need the space to keep vehicles or belongings, but you have a hobby or a profession that allows or requires space at home to work. Constructing a detached garage could fill that requirement as well. If you have a loved one who is need of more personal care but the thought of a retirement or convalescent home is undesirable, or you are interested in generating rental income but you do not have the interest or ability to invest in a rental property, a detached garage with a loft or an apartment can be the perfect solution.
There are many different and sensible designs for detached garages available to purchase out on the market nowadays. You are sure to discover a garage design to fit your needs, whether it is to have a single, double, or triple garage, or if you looking for that loft, apartment or workshop you have always wanted. The World Wide Web is one place to easily and quickly find different garage designs to search through. Architect and CAD drafting businesses have come up with dozens of garage plans to suit most needs, and if you have some specific needs that the stock plans do not address, these companies can alter existing plans or custom design one just for you.
It is important to check with the building department of the city or township in which you reside to make sure a detached garage, with or without a living space, meets all zoning requirements. In some locations you could be violating the zoning restrictions by building a detached structure and renting it if the area is zoned for single family houses. You might currently even be in violation and not know it if you have a basement in which you rent out and have not even checked with the zoning of your city.
If your needs require a detached garage and you want to purchase garage designs over the internet, make sure the company from which you buy includes not only the plans but a complete design plan. This package needs to include all the information necessary to meet current building permitting requirements and to allow the contractor you hire to secure correct construction bids. If adjustments to an existing plan are required, the ability to communicate with a draftsman and get a timely response is really important.
Unless you are designing an entire custom garage, make sure you ask the design company about a money-back guarantee. The guarantee should state that if you buy one of their pre-designed garage plans and it does not work on your property, you are qualified to receive a full refund. You should also be given time to review the blueprints once you have them. Three months is adequate to check with your building department and consult with your contractor to make sure the plans are usable. If not, the company should really refund you your money and should work with you to create a design that does work and one with which you will be satisfied.
Saturday, February 16, 2013
Home Loan Rate Comparison
The purchase of a home can be an exciting and overwhelming period in your life. Selecting just the right home is merely the first step. The second step is to select the perfect home loan to suit your requirements and your budget. There are many different types of mortgages that are available, some for first time home buyers, some for veterans, and some for regular citizens. Most home loans differ on length of the loan and rate. The rate that you get on your mortgage is a very crucial sign of your current and future budget.
Differences in Mortgage Rates
Current mortgage interest rates are on the rise again. With the current state of the economy, a mortgage rates comparison could help current home owners pay more towards principal on their mortgage. Those people on interest only mortgages are seeing large reductions in their mortgage repayments. Depending on the current mortgage interest rate that you are looking to obtain, taking advantage of the variety of current interest rates on home loans can help keep your interest charges low for the length of your loan.
Your mortgage interest rate can be fixed, variable, or be structured to have a combination of the two. A fixed rate is just that, fixed. It does not move. If you fix your interest rate and rates drop, you will be at a disadvantage. You are still paying the higher rate. But if you fix your interest rate and then rates rise as they are now, you are at an advantage. You do not have to pay as the rate increases. If you are hoping to stay in the home you are buying for more than 5 years, you should seriously consider a fixed interest mortgage rate. This will allow you to pay down the principal on your loan. The way that a loan amortization schedule works is that during the initial 5 years of the mortgage, the majority of your payments get allocated to paying off interest, and only a small part is allocated towards principal. If you do not plan to stay in your house longer than 5 years, then an interest only home loan may be the best option for you. You can pay as much towards principal as you would like, but you could also use the money you save doing so to renovate the house and increase the value.
If you have special status, you may qualify for special home loan rates. Those people with special status often include first time home buyers, veterans, civil servants, and those on disability. Sometimes having a special status will allow people to pay a lower interest rate and lower bank fees. Special status home loans may also have different mortgage lending criteria. For example, the deposit requirement can be significantly lower, and often times there can be discounts on taxes and fees. Be sure to research whether you are able to apply for a special status mortgage, as there are many advantages involved.
If you are considering purchasing a home, remember to make sure that you understand all of the financial home loan products available to you with a full interest rate comparison. If you are wise you will research carefully so that you understand the different mortgages available and choose those one that makes the most financial sense for you and your future plans.
Differences in Mortgage Rates
Current mortgage interest rates are on the rise again. With the current state of the economy, a mortgage rates comparison could help current home owners pay more towards principal on their mortgage. Those people on interest only mortgages are seeing large reductions in their mortgage repayments. Depending on the current mortgage interest rate that you are looking to obtain, taking advantage of the variety of current interest rates on home loans can help keep your interest charges low for the length of your loan.
Your mortgage interest rate can be fixed, variable, or be structured to have a combination of the two. A fixed rate is just that, fixed. It does not move. If you fix your interest rate and rates drop, you will be at a disadvantage. You are still paying the higher rate. But if you fix your interest rate and then rates rise as they are now, you are at an advantage. You do not have to pay as the rate increases. If you are hoping to stay in the home you are buying for more than 5 years, you should seriously consider a fixed interest mortgage rate. This will allow you to pay down the principal on your loan. The way that a loan amortization schedule works is that during the initial 5 years of the mortgage, the majority of your payments get allocated to paying off interest, and only a small part is allocated towards principal. If you do not plan to stay in your house longer than 5 years, then an interest only home loan may be the best option for you. You can pay as much towards principal as you would like, but you could also use the money you save doing so to renovate the house and increase the value.
If you have special status, you may qualify for special home loan rates. Those people with special status often include first time home buyers, veterans, civil servants, and those on disability. Sometimes having a special status will allow people to pay a lower interest rate and lower bank fees. Special status home loans may also have different mortgage lending criteria. For example, the deposit requirement can be significantly lower, and often times there can be discounts on taxes and fees. Be sure to research whether you are able to apply for a special status mortgage, as there are many advantages involved.
If you are considering purchasing a home, remember to make sure that you understand all of the financial home loan products available to you with a full interest rate comparison. If you are wise you will research carefully so that you understand the different mortgages available and choose those one that makes the most financial sense for you and your future plans.
Thursday, January 31, 2013
Seeking Va Home Loan With Bad Credit: The Major Considerations
Veterans are not immune to financial difficulties. In fact, they face arguably more difficult challenges than we do since they must first adjust to life outside the military, establishing a new career etc. So, when it comes to seeking a mortgage, the challenge can be very big. Thankfully, the ability to secure VA home loans with bad credit offers a solution.
The Department of Veteran Affairs (VA) was established to help military veterans returning from conflict to return to civilian life, and finance is a major part of their efforts. With their support, veterans have a far better chance of getting approval, despite bad credit scores, and to ultimately buy the home they want.
What is more, because of the terms available, they are much more affordable than their civilian equivalent. Remember, the VA does not issue mortgages, only underwrites them. Nevertheless, a VA home loan still offers veterans and their families highly attractive options.
Qualifying for a VA Mortgage
It is no surprise that those seeking to secure a VA home loan with bad credit need to be former members of one of the branches of the military - either the US Army, Marines, Navy or Air Force, or the Home Guard, Reserves or Coast Guard. But there is more to it than that.
Applicants also need to have at least a respectable credit history. For example, prior to the date of the application, they cannot have defaulted on a loan for 12 months, or have been declared bankrupt for at least 24 months. To secure approval despite bad credit, the veteran needs to convince the lender, but the lenders is not the VA.
There are special circumstances considered too, with bankruptcy that was brought on by circumstances beyond the control of the applicant not viewed as seriously as bankruptcy caused by poor money management. A debt settlement does not affect the chances of getting a VA home loan.
Credit Scores Are Limited
Of course, there are ways to greatly improve the likelihood of securing a VA home loan with bad credit, with increasing the credit score one of the most effective. Taking out some smaller personal loans, and repaying them in full very quickly, has a definite benefit to these scores. Each time a loan is cleared, regardless of the amount, it pushes the score upwards,
If a bankruptcy exists on a credit record, as soon as the discharge is received, notify the credit rating agencies so they can remove it from the record. They will then increase the score to reflect the removal of that debt. Remember that getting approval despite bad credit is easier with a higher score.
Also, opening two secured credit card accounts, each with just small balances is another way to vastly improve credit ratings. Of course, paying the balances immediately after they are used is essential. Then getting better terms on a VA home loan is possible.
Secured Credit Cards
As mentioned, secured credit cards can help in securing a VA home loan with bad credit. But it is worth noting that the terms available from a VA mortgage make approval despite bad credit much more probable.
VA home loans come with terms where 25% of the mortgage is guaranteed by the VA. Because just 75% of the mortgage is unsecured, the interest rates are lower, and the repayments are more affordable. So, even with a slightly improved credit score, the savings compared to a normal mortgage deal can be huge.
The Department of Veteran Affairs (VA) was established to help military veterans returning from conflict to return to civilian life, and finance is a major part of their efforts. With their support, veterans have a far better chance of getting approval, despite bad credit scores, and to ultimately buy the home they want.
What is more, because of the terms available, they are much more affordable than their civilian equivalent. Remember, the VA does not issue mortgages, only underwrites them. Nevertheless, a VA home loan still offers veterans and their families highly attractive options.
Qualifying for a VA Mortgage
It is no surprise that those seeking to secure a VA home loan with bad credit need to be former members of one of the branches of the military - either the US Army, Marines, Navy or Air Force, or the Home Guard, Reserves or Coast Guard. But there is more to it than that.
Applicants also need to have at least a respectable credit history. For example, prior to the date of the application, they cannot have defaulted on a loan for 12 months, or have been declared bankrupt for at least 24 months. To secure approval despite bad credit, the veteran needs to convince the lender, but the lenders is not the VA.
There are special circumstances considered too, with bankruptcy that was brought on by circumstances beyond the control of the applicant not viewed as seriously as bankruptcy caused by poor money management. A debt settlement does not affect the chances of getting a VA home loan.
Credit Scores Are Limited
Of course, there are ways to greatly improve the likelihood of securing a VA home loan with bad credit, with increasing the credit score one of the most effective. Taking out some smaller personal loans, and repaying them in full very quickly, has a definite benefit to these scores. Each time a loan is cleared, regardless of the amount, it pushes the score upwards,
If a bankruptcy exists on a credit record, as soon as the discharge is received, notify the credit rating agencies so they can remove it from the record. They will then increase the score to reflect the removal of that debt. Remember that getting approval despite bad credit is easier with a higher score.
Also, opening two secured credit card accounts, each with just small balances is another way to vastly improve credit ratings. Of course, paying the balances immediately after they are used is essential. Then getting better terms on a VA home loan is possible.
Secured Credit Cards
As mentioned, secured credit cards can help in securing a VA home loan with bad credit. But it is worth noting that the terms available from a VA mortgage make approval despite bad credit much more probable.
VA home loans come with terms where 25% of the mortgage is guaranteed by the VA. Because just 75% of the mortgage is unsecured, the interest rates are lower, and the repayments are more affordable. So, even with a slightly improved credit score, the savings compared to a normal mortgage deal can be huge.
Friday, January 25, 2013
Home Loan Mortgage Rate Quote: Online Convenience
You can find ANYTHING on the Internet! Never is this as true as when it comes to finding home loan mortgage rate quotes. In fact, along with pornography, finance and banking has probably been the biggest internet success of all. There is nothing you can do, nothing you can find in a physical bank branch that you can't get from a bank over the Internet. This includes a home loan mortgage rate quote.
Convenience at Your Fingertips
Of course, buying a house is the biggest purchase that 90 percent of the world's population will ever make in their lives. So, it's probably advisable not to go through the entire process yourself with only a mouse for protection or counsel. It is a valuable, and often indispensable, part of a good decision-making process that you have communication with an actual human being with some expertise at some point. However, when it comes to the preliminary parts of the exercise, such as acquiring a home loan mortgage rate quote, Internet-based applications embedded into bank websites are convenient and useful. You simply enter the relevant data into various drop-down boxes and menus, and select the number of years over which you wish to have your mortgage. You will be given a number of options as to whether you would like to choose a fixed or floating rate over a time frame of anywhere from 2 to 5 years. The PHP software scripts - similar to a spreadsheet formula - automatically calculate your home loan mortgage rate quote.
Nothing's Definite Until You See It on Paper
Bear in mind, however, that an automatically generated home loan mortgage rate quote is by no means the "final word." If anything, it is more of a rough guideline or an estimate to get you started on thinking about your range of affordability. A home loan mortgage rate quote arrived at in this way is also not a contract and is not binding upon the bank or finance company in any way, shape, or form. So, you can forget about waving in your mortgage manager's face and screaming: "LOOK - IT SAYS SO RIGHT HERE!".
The real home loan mortgage rate quote is arrived upon when you sit down with the mortgage manager, broker, or consultant; and they take into account any number of a range of factors that my influence your case in one direction or another. The bank will take your financial situation and any other relevant factors into account, look at the numbers, and, in some cases, even things like job stability, work history, credit history, whether you have children or not, current assets, and partner assets. From that information, they will arrive at a picture of the borrower on which they will decide whether or not he is a good investment. The real home loan mortgage rate quote is then written in ink with a person's signature underneath, an old sign that a person is still held to be as good as their word.
Convenience at Your Fingertips
Of course, buying a house is the biggest purchase that 90 percent of the world's population will ever make in their lives. So, it's probably advisable not to go through the entire process yourself with only a mouse for protection or counsel. It is a valuable, and often indispensable, part of a good decision-making process that you have communication with an actual human being with some expertise at some point. However, when it comes to the preliminary parts of the exercise, such as acquiring a home loan mortgage rate quote, Internet-based applications embedded into bank websites are convenient and useful. You simply enter the relevant data into various drop-down boxes and menus, and select the number of years over which you wish to have your mortgage. You will be given a number of options as to whether you would like to choose a fixed or floating rate over a time frame of anywhere from 2 to 5 years. The PHP software scripts - similar to a spreadsheet formula - automatically calculate your home loan mortgage rate quote.
Nothing's Definite Until You See It on Paper
Bear in mind, however, that an automatically generated home loan mortgage rate quote is by no means the "final word." If anything, it is more of a rough guideline or an estimate to get you started on thinking about your range of affordability. A home loan mortgage rate quote arrived at in this way is also not a contract and is not binding upon the bank or finance company in any way, shape, or form. So, you can forget about waving in your mortgage manager's face and screaming: "LOOK - IT SAYS SO RIGHT HERE!".
The real home loan mortgage rate quote is arrived upon when you sit down with the mortgage manager, broker, or consultant; and they take into account any number of a range of factors that my influence your case in one direction or another. The bank will take your financial situation and any other relevant factors into account, look at the numbers, and, in some cases, even things like job stability, work history, credit history, whether you have children or not, current assets, and partner assets. From that information, they will arrive at a picture of the borrower on which they will decide whether or not he is a good investment. The real home loan mortgage rate quote is then written in ink with a person's signature underneath, an old sign that a person is still held to be as good as their word.
Friday, January 11, 2013
Business Plan, For Mortgage Professionals, Targeting First Time Home Buyers
The housing market, combined with the recent tax incentive, has created a new target audience for Realtors and Loan Officers. The need for a sales and marketing plan to address education, building relationships, and communication will generate increased business for the Loan Officer and Realtor to provide assistance to first time home buyer.
The housing downturn has created significant demand for homeownership, especially among first-time home buyers (FTHB), according to a survey on Realtor.com. That is great news for the real estate market, but there are some significant challenges that Realtors and Mortgage Professionals will face.
First challenge: Looming Deadline with NO PLAN
November 30th, 2009 is the date the tax credit goes away. That's 5 months from the day this article was written, which seems like a long time but the reality is that it will be here before we know it. Those who plan on taking advantage of this opportunity need to have a well thought out, fool-proof plan to execute. The sad reality is that people have been/were so busy with refinance business that they didn't have time to build a plan. Others are starving for direction and want a plan but don't have the "know-how" to build one. A strategic sales and marketing plan includes tactics that keep your plan within the necessary timeline.
Second challenge: Weak Relationships
FTHBs are tricky and require a strong relationship and good communication between the Realtor and Loan Officer. As a result of the recent low interest rate environment or "mini refi-boom, mortgage companies focused much of their efforts and time on capturing the refinance opportunities, not building relationships with Realtors. The result: many Realtors were left unattended. Relationship marketing tactics are needed to generate a successful partnership to meet this challenge.
Third challenge: Weak Value Propositions
Everyone knows that Loan Officers need to partner with Realtors but the question is , "why would they partner with you?" Good service and low rates are overused clichs and don't differentiate. Relationships are great, but at the end of the day the relationship needs to lead to "value creation" for both parties for it to be sustainable. A sales marketing plan will outline the strategy needed to create value for the Loan Officer and Realtor.
Fourth challenge: Education Gap
The Obama administration is hoping that a recently enacted tax credit can generate housing demand and help mop up the existing unsold inventory. But according to a survey by Move, Inc.--which operates Realtor.com--nearly half (47%) of home buyers don't even know the tax credit exists! A marketing communication plan is needed to target the first time home buyer educating them about this tax incentive.
Fifth challenge: Fear in the Marketplace
-52% of Americans are concerned that they or someone they know will face foreclosure in the next six to 12 months.
-18.9% (one out of five) of homeowners plan to take advantage of the administration's new program to help prevent foreclosures.
-21% of all homeowners with a mortgage contacted a lender to restructure their loan in the last 12 months.
-Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.
-27.1% of adults believe that they or someone they know may default on their mortgage because of unemployment or because they owe more on their home than it's worth.
I won't even begin to mention the media's contribution to this fear. The reality is that people are scared and need guidance. The question is , "who will they trust?" They will trust those whom they have a strong relationship with and/or those who have unshakeable credibility. To meet this challenge create a marketing plan that brands you as experienced in your field and a knowledgeable professional that can be trusted.
The good news in all of this is that there is a ton of opportunity out there. Take a look at the statistics of when Americans are planning on buying:
-23% of all adults plan to purchase a home in the next five years
-5.8% within next 12 months,
-12.8% within the next two years
Here is the opportunity -
First-time Home Buyers make up over half (53.5%) of the market, and the government is offering them an ,000 tax credit to purchase a house. But here's the kicker: 47.6% of Americans don't know about the tax credit! That's almost half the American population! What this means to you is that a lot of people want to buy a home in the next 12 months and most of them are FTHBs who aren't even aware of a huge incentive (,000 tax credit).
Okay, so now you see the opportunity, and the question that should be going through your mind is, "how do I maximize this opportunity given the challenges outlined above?" Great question!
This is a great opportunity and the Million Dollar Challenge was created to assist Mortgage Professionals and Realtors to take advantage of it. The Million Dollar Challenge is a call to action and a business plan example to help First Time Home Buyers receive ,000,000 in tax credits.
The housing downturn has created significant demand for homeownership, especially among first-time home buyers (FTHB), according to a survey on Realtor.com. That is great news for the real estate market, but there are some significant challenges that Realtors and Mortgage Professionals will face.
First challenge: Looming Deadline with NO PLAN
November 30th, 2009 is the date the tax credit goes away. That's 5 months from the day this article was written, which seems like a long time but the reality is that it will be here before we know it. Those who plan on taking advantage of this opportunity need to have a well thought out, fool-proof plan to execute. The sad reality is that people have been/were so busy with refinance business that they didn't have time to build a plan. Others are starving for direction and want a plan but don't have the "know-how" to build one. A strategic sales and marketing plan includes tactics that keep your plan within the necessary timeline.
Second challenge: Weak Relationships
FTHBs are tricky and require a strong relationship and good communication between the Realtor and Loan Officer. As a result of the recent low interest rate environment or "mini refi-boom, mortgage companies focused much of their efforts and time on capturing the refinance opportunities, not building relationships with Realtors. The result: many Realtors were left unattended. Relationship marketing tactics are needed to generate a successful partnership to meet this challenge.
Third challenge: Weak Value Propositions
Everyone knows that Loan Officers need to partner with Realtors but the question is , "why would they partner with you?" Good service and low rates are overused clichs and don't differentiate. Relationships are great, but at the end of the day the relationship needs to lead to "value creation" for both parties for it to be sustainable. A sales marketing plan will outline the strategy needed to create value for the Loan Officer and Realtor.
Fourth challenge: Education Gap
The Obama administration is hoping that a recently enacted tax credit can generate housing demand and help mop up the existing unsold inventory. But according to a survey by Move, Inc.--which operates Realtor.com--nearly half (47%) of home buyers don't even know the tax credit exists! A marketing communication plan is needed to target the first time home buyer educating them about this tax incentive.
Fifth challenge: Fear in the Marketplace
-52% of Americans are concerned that they or someone they know will face foreclosure in the next six to 12 months.
-18.9% (one out of five) of homeowners plan to take advantage of the administration's new program to help prevent foreclosures.
-21% of all homeowners with a mortgage contacted a lender to restructure their loan in the last 12 months.
-Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.
-27.1% of adults believe that they or someone they know may default on their mortgage because of unemployment or because they owe more on their home than it's worth.
I won't even begin to mention the media's contribution to this fear. The reality is that people are scared and need guidance. The question is , "who will they trust?" They will trust those whom they have a strong relationship with and/or those who have unshakeable credibility. To meet this challenge create a marketing plan that brands you as experienced in your field and a knowledgeable professional that can be trusted.
The good news in all of this is that there is a ton of opportunity out there. Take a look at the statistics of when Americans are planning on buying:
-23% of all adults plan to purchase a home in the next five years
-5.8% within next 12 months,
-12.8% within the next two years
Here is the opportunity -
First-time Home Buyers make up over half (53.5%) of the market, and the government is offering them an ,000 tax credit to purchase a house. But here's the kicker: 47.6% of Americans don't know about the tax credit! That's almost half the American population! What this means to you is that a lot of people want to buy a home in the next 12 months and most of them are FTHBs who aren't even aware of a huge incentive (,000 tax credit).
Okay, so now you see the opportunity, and the question that should be going through your mind is, "how do I maximize this opportunity given the challenges outlined above?" Great question!
This is a great opportunity and the Million Dollar Challenge was created to assist Mortgage Professionals and Realtors to take advantage of it. The Million Dollar Challenge is a call to action and a business plan example to help First Time Home Buyers receive ,000,000 in tax credits.
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