Minimum Credit Score For Auto Loan – Best Score For Guaranteed Approval
February 18, 2012 | 
Author If you don’t know what the minimum credit score for an auto loan is then you are setting yourself up for rejection after rejection. I don’t want you to get rejected so I’ve put together this short article to give you some inside information on credit scoring and tips to follow to improve your approval rate with lenders.
What’s with credit scoring anyway?
The ‘credit score’ was created as a standard for assessing the ability of a borrower to repay the amount borrowed in the form of a loan. It’s a standardized system of rating and is calculated using several variables. It it’s simplest for your credit score will always be assessed based on the following guidelines:
720 and above is Prime Credit
680 to 719 is Good Credit
640 to 679 is Marginal Credit
600 to 639 is Sub-Prime Credit
580 to 599 is Poor Credit
525 to 579 is Bad Credit
480 to 524 is Very Bad Credit
If you find yourself in any category below marginal credit then it’s not the end of the world. The finance industry has recognized that in these tough economic times there are a lot of people who can’t boast a good or above credit rating. As a result of this there a lots of companies that will lend money to people who for whatever reason have a poor credit standing.
What’s really good about auto loans is that qualifying is not as tough as say qualifying for a mortgage. The sum of money involved is usually smaller in comparison and so all one has to do is meet the minimum credit score for an auto loan.
If you find yourself with a score of say 480 – 524 (Very bad credit), the best way to improve your chances of getting an auto loan approval is to come up with a down payment. This will not only reduce the amount you have to borrow, but will give the lenders some confidence that you are at least able to come up with some of the cash.
Finding that perfect car loan doesn’t have to be difficult and I hope that having read this article you now understand the fundamentals of credit scoring and what you can do today to ensure that you are successful with a loan application.
There are lots of online auto loan companies that specialize in lending to people with very low credit scores. I am confident that now you’ll be able to chose the right one and get that auto loan you’ve always wanted.
Mother-in-Law Apartments Or Granny Flats
About 35 million senior citizens are residing in the U.S. whose average life expectancy is 77.9 years. This is going to increase further in the coming years due to the availability of better living conditions and improved health facilities. Providing accommodation to these senior citizens is one of the challenging aspects encountered by the United States Department of Housing and Urban Development. A mother-in-law apartment or house is a unique concept that has evolved as a probable solution to this kind of problem.
A mother-in-law apartment or a home can be aptly described as an accessory dwelling unit or a secondary suite that is associated with the primary residence. These sorts of dwelling units are primarily constructed with a separate entrance, kitchen, bathroom and a living area. The primary objective of constructing such a dwelling unit is to provide accommodation to an elderly relative who is unable to lead life on their own. Apart from being in close proximity to the near and dear ones, this concept also ensures maximum privacy and freedom to the senior citizens.
Several municipalities do not permit construction of a secondary suite since they are not originally included in the building plan and violate the district zoning regulations. However, there are certain municipalities that permit the construction of a mother-in-law apartment on the clause that these units should not be given on rent and must be occupied by an elderly relative.
Mother-in-law apartments or granny flats offer quite a number of advantages. An elderly person can take up the responsibility of a nanny, overseeing the general well being and security of the growing kids. They can also take a major role in house-hold management and important household responsibilities like receiving courier, or attending phone calls. Apart from these, mother-in-law apartments can also be used as a potential source of earning retirement income. The homeowner can himself move into the granny flat and rent out the main house. With the growing inflation, mother-in-law apartments also provide a money saving and economical alternative to independent living or assisted living facilities, both of which are quite expensive.
VA Streamline Refinance Or IRRRL
Many Veterans are taking advantage of the present low interest rates available to refinance their current VA loan. The Streamline, technically known as the IRRRL (Interest Rate Reduction Refinancing Loan) is a loan designed to take an existing VA loan and allow it to be refinanced to a VA Loan with a lower interest rate. The interest rate on the new loan must be lower than the interest rate on the present loan. The exception to this is where an ARM (Adjustable Rate Mortgage) is being refinanced to a fixed rate mortgage. This is the only scenario where the interest rate is allowed to be higher on the new loan.
Qualifying for an IRRRL (Streamline) is relatively simple. The VA does not require an appraisal or minimum credit score for a streamline. The amount of closing costs charged the borrower are regulated by VA guidelines and can be rolled into the new loan. Generally the veteran is eligible if the payments on the present mortgage are current. However, specific lenders have tightened their requirements during the past couple of years so it is wise to check with a lender to see what is required. When the original VA Loan was incurred the buyer was required to live in the home. With a VA Streamline you do not currently have to be living in the home.
You do not have to do your IRRRL through the Financial Institution currently holding your VA Mortgage. You can choose any Lender to deal with. Of course you will want a lender who is qualified to do VA Loans and will respond to your emails or calls in a timely manner and takes your refinance as seriously as they would if they were working on their own home loan.
As far as Veterans Eligibility goes, the same certificate of eligibility that is on the current VA mortgage is used on the streamline and can be verified online by the Lender handling the loan.
This is not a Cash out Refinance and the borrower is not allowed to take cash as a result of the deal. However, there are two possibilities where the borrower can end up with some extra money in addition to the benefit of a lower interest rate. If there is money left in the escrow reserve account for the current mortgage there will be a refund. The amount of the refund could be possibly be around $1,000, more or less depending on the remaining balance at the time of closing. In addition, as a result of refinancing, one or two monthly mortgage payments may be deferred.
The length of the Streamline mortgage can be 10-30 years. Veterans who are in a position to refinance from a high interest rate to a lower rate often consider doing a 15 year loan so that the home is paid off sooner. Even with a lower interest rate, the monthly payment generally will go up when changing from a 30 year to a 15 year mortgage. If the borrower can afford the increased monthly payment, a 15 year loan is definitely one to consider because of the long term benefits.
Many veterans have taken out a second mortgage on their home and wonder if they can still get a streamline. The answer is yes if the second mortgage holder will sign a subordination agreement.
The application process is quick and easy “streamlined” and can be explained by your Lender. Just make sure you are dealing with a Lender and a Loan Officer who is experienced in assisting Veterans with VA Loans, IRRRLs and Refinances.
Upside Down Mortgage Loan – Tips to Refinance an Upside Down Home Loan
Many homeowners are struggling as they are not able to pay their loan on time and are facing foreclosure. This is because the value of their property has declined more than 50% than what they actually bought it for. Now they owe much more money to the lenders than the actual value of the property to the lenders.
Tips to Refinance Upside Down Home Loan Refinance
If you are upside down on your mortgage and it is creating difficulty for you, then you can refinance your loan. Borrower need not to worry much about it as they still have a hope and chances to save their homes by getting their upside down mortgage loan refinanced by the related lenders.
1. You can refinance your loan by lowering interest rates which will help you to stay in your home. Some homeowners are tempted in a myth that the rates are going to be decreased further because of the bad economic scenario but it is advised that you do not take risk and wait for the situation to get worse.
2. You can be offered for a fixed rate mortgage loan by the lender to refinance your upside down home loan easily.
3. You must keep in mind objectives that will help you to figure out what type of loan you want and whether it will fulfill your financial goals.
4. You can even stay with your existing home mortgage rates. They may be reduced some fees to help you refinance in better way.
5. A professional help can be taken by an agent. You can appoint him to take care of your situation professionally and understand your circumstances to work upon it further.
6. Do not pick calls of anyone unless you approach to the loss mitigation department. You are needed to call them to know how to refinance an upside down home loan mortgage.
What is the Average Car Loan Rate of Interest For People With Bad Credit?
Many people that are looking to buy a car and have bad credit, really don’t know what to expect in regards to the interest rate that they will be asked to pay (or TOLD to pay by some dealers). Average car loan rates for people with good credit can be anywhere from 4% to 7% depending on the market and the source that you use for financing.
When you have bad credit, average car loan rates can vary dramatically. This is where finding a good source for your auto financing is crucial.
For example, if you use a car lot that has in house financing, you can expect to pay upwards of 20% interest and up to 28%, depending on your state of residence. Average interest rates charged by these establishments used to be unregulated and eventually state laws had to come in to keep things from getting out of hand.
In all truthfulness, there is no such thing as an average rate for a car loan when it comes to people that have bad credit. There are too many variables and too many stipulations and conditions that determine the rate. Getting the lowest rate for a car loan when you have a low credit score is determined more by the lending source that you select, over all other factors.
You can expect to pay a higher rate than someone that has excellent credit… that is to be expected. You should not however, accept any offer at a rate of over 12% unless you have thoroughly researched and explored other possibilities first. There’s nothing worse than having bad credit and having high payments… that makes getting ahead and improving your credit that much more difficult.
To obtain the lowest car loan rate on a car when you have bad credit, you should look into using reputable, legitimate sources for online car loans. Lending services vary one from another. Some are reputable and some are not. Be sure of what you’re doing before you jump in and sign a contract.
Some Facts About Payday Loan Debt Consolidation
In case you find yourself unable to repay a payday cash advance on time, payday loan debt consolidation is an option to help you out. Many of you need to take cash advances from loan companies for various reasons. You may have some urgent financial payments to make. The payday loan is a short term cash advance which you can repay when you receive your next paycheck. If you are unable to repay the loan by the due date, you are able to extend the advance for another month. The problem with this is that the amount payable by you may accumulate to a very large sum. This makes it more difficult for you to repay the cash advance.
How Does Consolidation of Debt Help?
There is a way to help you out in such a situation. You can approach a debt management company to provide you with a payday loan debt service. Once you contact the debit consolidation company, they will communicate with the cash advance company on your behalf. Their job is to get the loan company to agree to a consolidated repayment amount which is advantageous to you. This amount will be lower than the amount you had to pay earlier. The consolidation loan amount will be calculated with a lower interest rate and will give you a lower monthly payment amount.
When To Contact A Debt Management Company
You should always keep in mind that a loan till pay day is a short term loan. It has to be repaid on your next payday which is usually after a month. If for any reason you cannot repay the amount on the due date, the cash advance can be extended with additional fees. This could lead to the payable amount to become very high. You should contact a debit management company as soon as you extend your advance. By doing so, you can prevent the debit amount from becoming too high and more difficult for you to pay. The sooner you use this service, the easier it will be for you to repay the cash advance.
When you take a debt reduction service, you do not need to communicate with the lending company any further. The company will contact them on your behalf. If the creditors want to get in touch with you, they will have to do so through the debt reduction company.
If you have taken multiple payday cash advances and cannot repay them on time, the payday loan debt consolidation service can help reduce the repayable amount. This would make it easier for you to repay the loan.
18 Ways to Reduce Your Mortgage Loan
1. Skip the introductory rate (Honeymoon)
Beware of lenders bearing gifts! Introductory or honeymoon rates have long been an important marketing tool for lenders. You are initially offered a cheap rate on your loan to get you in the door but once the honeymoon period is over, the lender will switch you to a higher variable rate of interest. An example of this is an Adjustable Rate Mortgage (ARM).
There are two problems with this scenario. First, the variable rate is often higher than some of the lower basic loans available so you could end up paying more. Second, you need to clearly understand that a honeymoon rate applies only for the first year or two of the loan and is a minor consideration compared to the actual variable rate that will determine your repayments over the next 20 or so years.
You may also be hit with fairly steep exit penalties if you want to refinance in the first two or three years to a cheaper loan. So make sure you fully understand what you are letting yourself in before setting off on a “honeymoon” with your lender.
2. Pay it off quickly
Time is money. There are all sorts of strategies for paying less interest on your loan, but most of them boil down to one thing: Pay your loan off as fast as you can. For example, if take out a loan of $300,000 at 6.5 per cent for 30 years, your repayment will be about be about $1,896. This equates to a total repayment of $682,632 over the term of your loan.
If you pay the loan out over 15 years rather than 30, your monthly payment will be $2,613 a month (ouch!). But the total amount you will repay over the term of the loan will be only $470,397 – saving you a whopping $212,235
· Make repayments at a higher rate
A good way to get ahead of your mortgage commitments is to pay it off as if you have a higher rate of interest. Get a loan at the lowest interest rate you can and add 2 or 3 points to your repayment amount. So if you have a loan at about 6.5 percent and pay it off at 10 per cent, you won’t even notice if rates go up. Best of all, you’ll be paying off your loan quicker and saving yourself a packet.
· Make more frequent payments
The simple things in life are often the best. One of the simplest and best strategies for reducing the term and cost of your loan (and thus your exposure should interest rates rise) is to make your repayment on a fortnightly (bi-weekly) rather than monthly basis. How can this make a difference I hear you ask? It works like this:
Split your monthly payment in two and pay every fortnight. You’ll hardly feel the difference in terms of your disposable income, but it could make thousands of dollars and years difference over the term of your loan. The reason for this is that there are 26 fortnights in a year, but only 12 months. Paying fortnightly (bi-weekly) means that you will be effectively making 13 monthly payments every year. And this can make a big difference.
Using our example from above, by paying monthly, you will end uprepaying $682,632 over the term of your loan. But, by paying fortnightly (bi-weekly), you will save $87,254 in interest and 5.8 years off the loan. Zero pain to you, major benefit to your pocket.
· Hit the principal early
Over the first few years of your mortgage, it may seem that you are only paying interest and the principal isn’t reducing at all. Unfortunately, you’re probably right, as this is one of the unfortunate effects of compound interest. So you need to try everything you can to get some of the principal repaid early and you’ll notice the difference.
Every dollar you put into your mortgage above your repayment amount attacks the capital, which means down the track you’ll be paying interest on a smaller amount. Extra lump sums or regular additional repayments will help you cut many years off the term of your loan.
· Forego those minor luxuries
This is the bit you don’t want to read. Once you have a mortgage, your life is likely to be luxury-free (or at least pretty close to it). Think of all the weight you will lose by giving up your favourite indulgent snack. For the sake of your health you should quit smoking and drink less anyway. Take your lunch from home and save on bad fast food. Trust me, your body will thank you for it.
If you’re still not convinced consider the following example. A typical day may include a pack of cigarettes ($10), a coffee and donut ($5), lunch ($12) and a couple of beers after work ($8). That’s $35 a day or $175 a week or $750 a month or $9,100 a year.
Assuming a mortgage of $300,000 at 6.5 per cent over 30 years, by making $750 in extra repayments each month, you’d save more than $216,000 in interest and be mortgage free in just over 14.5 years.
No one is saying you should live a convict existence but just cutting down a little on your expenses will see you reap huge financial benefits.
3. Get a package
Speak to your lender about the financial packages they have on offer. Common inclusions are discounted home insurance, fee-free credit cards, a free consultation with a financial adviser or even a fee-free transaction account. While these things may seem small beer compared to what you are paying on your home loan, every little bit counts and so you can use the little savings on other financial services to turn them into big savings on your home loan.
There are also “professional” packages on offer for amounts over a certain limit, which can be as little as $150,000. Some lenders offer discounts to specific professional groups or members of professional organizations. Ask your lender if your occupation qualifies you for any discount. You might be pleasantly surprised. There are all sorts of discounts and reductions attached to these packages so make sure you ask your lender about them.
4. Consolidate your debts
One of the best ways of ensuring you continue to pay off your loan quickly is to protect yourself against interest rate rises. If your home loan rate starts to rise, you can be absolutely positive about one thing – your personal loan rate will rise and so will your credit card rate and any hire purchase rate you may happen to have.
This is not a good thing as the interest rates on your credit cards and personal loans are much higher than the interest rate on your home loan. Many lenders will allow you to consolidate – re-finance – all of your debt under the umbrella of your home loan. This means that instead of paying 15 to 20 per cent on your credit card or personal loan, you can transfer these debts to your home loan and pay it off at 7.32 per cent.
As always, any extra repayments or lump sums will benefit you in the long run.
5. Split your loan
Many borrowers worry about interest rates and whether they will go up but don’t want to be tied down by a fixed loan. A good compromise is a split loan, or combination loan as they are often known, which allows you to take part of your loan as fixed and part as variable. Essentially this allows you to hedge your bets as to whether interest rates are going to rise and by how much.
If interest rates rise you will have the security of knowing part of your loan is safely fixed and won’t move. However, if interest rates don’t go up (or if they rise only slightly or slowly) then you can use the flexibility of the variable portion of your loan and pay that part off more quickly.
6. Make your mortgage your key financial product
Mortgage products known as all-in-one loans, revolving line-of-credit or 100 percent offset loans allow you to use your mortgage as your key financial product. This means you have one account into which you can pay all of your income and draw from for your living expenses by using a credit card, EFTPOS or a checkbook, as well as making your mortgage repayments..
These types of accounts can make a huge difference to the speed at which you pay off your loan. Because your whole pay goes into your mortgage account you are reducing the principal on which interest is charged. Sure, you might take a couple of steps back as you withdraw living expenses but careful use of this sort of product can get you thousands of dollars ahead of where you’d be with a “plain vanilla, pay once a month” home loan.
These loans work well when you are able to make additional payments towards the loan. If you are only able to make the equivalent of the minimum repayment on your loan (and not put in any extra) you may be better off with a cheaper standard variable or basic variable loan. However, it’s not unusual for dedicated borrowers using these types of loans to cut the term of a 30 year-old loan to less than ten.
7. Use your equity
If you have already paid off some of your home, you are said to have equity. Equity is the difference between the current value of your property and the amount you owe the lender. For example, if you have a property worth $500,000 on which you owe $150,000, you are said to have home equity of $350,000, which you can re-borrow without having to go through the approval process by accessing it through your existing loan.
Many lenders will allow you to borrow using your equity as collateral. Most lenders will allow you to borrow up to about 80 per cent of the loan-to-value ratio (LVR) of your available equity. If you are careful, you can use this equity to your advantage and help to pay off your home loan sooner.
Using an equity loan to improve your property could be a good way to ensure that your home increases in value over time. But larger expenses such as cars and holidays that would have been paid by credit card are more affordable on the lower rate of your home loan.
8. Switch to a lender with a lower rate (But do your sums)
It may sound like a simple idea but switching out of your current loan and taking out a loan at a lower rate can mean the difference of years and thousands of dollars. If you have a loan that is tricked up with all the features, or even if you have a standard variable loan, you might find that you could get a no frills rate that is as much as a percentage point cheaper than your current loan.
However, before you jump the gun, check out what it will cost you to switch loans. For example, there may be exit fees payable on your old loan and establishment fees and stamp duty on your new loan. Work it all out and if it makes sense, go for it.
9. Stay informed – don’t forget about your mortgage
Visit Mortgage Loan Hints.com
With any long-term commitment, there is always the temptation to let your mortgage roll along, make your repayments as they fall due and think as little about it as possible. As long as you keep up the repayments, there’s not much else you need to do, right?
This attitude can be a big mistake. Keep yourself up to date with what’s happening in the marketplace. You might find that there’s an opportunity to put yourself well ahead of the game. Rates change, new products and changes in the market itself may allow you to seize an opportunity or negotiate a better deal.
Stay informed and stay ahead of the game.
10. Get a cheap rate and invest the difference
When interest rates are low, like now, it is usually safe to say that inflation is also low. Thus, bricks and mortar may not be the best place to invest. Try getting the cheapest home loan you can find and make the minimum repayment. This allows you to use the extra cash to invest in other, more profitable areas.
You may find that the return you get on shares or some other type of investment means that you have created a nice little nest egg which you can use to pay off a bigger chunk of your home loan than you might otherwise have been able to do.
But beware – high returns often mean high risks. Before undertaking any investment, invest in a consultation with a qualified financial adviser.
11. Run an offset account
Instead of earning interest, any money you have in your offset account works to offset the interest you are paying on your home loan. For example you may have a mortgage of $300,000 at 6.5 percent and an offset account with $50,000 in it earning 3 percent.
This means that $250,000 of your loan is accruing interest at 6.5 percent but the rest is accruing interest at just over 3.5 percent (6.5 percent on your loan less the 3 percent the $50,000 in your offset account is earning). Imagine how much you can save!
Of course, the best sort of offset account pays the same rate as your loan (100 per cent offset).
12. Pay all your mortgage fees and charges up front
Some lenders allow you to add to the amount you borrow instead of coming up with cash for your upfront costs. While this can seem a blessing try to avoid doing this. Consider the following example:
Borrower A borrows $300,000 over 30 years at 6.5 percent. Her upfront costs are $1,000 but she has enough cash to make sure she can cover these. Her total repayment over 30 years will be $682,632
Borrower B takes out the same loan but doesn’t have enough cash to cover the upfront costs. So he borrows $301,000, at the same rate. Her total repayment over 30 years will be $684,907.
Two thousand odd-dollars might not sound like a huge amount but what could you buy with it if it stayed in your pocket?
13. Pay your first instalment before it’s due
With most new loans, the first instalment may not become due for a month after settlement. If you can manage it (and your lender will let you), pay the first instalment on the settlement date. If you do this, you will be one step ahead of the lender for the term of your loan. Every little bit counts.
14. Shop around and make sure your lender knows it
One of the most powerful tools you can have in the search for the best home loan is information. Make sure you have rung half a dozen lenders and brokers (as well done some internet research) before you start talking to your preferred lender about getting a new loan or refinancing your existing loan.
Make sure you know what rates and features are offered by each of your lender’s competitors on comparable products. Be ready to tell the lender what you are looking for and don’t be afraid to ask for extras. If they want your business, and know you know what you are talking about, they may be prepared to work that little bit harder to get your business.
Don’t be afraid to walk out if you aren’t getting the best possible deal you can.
15. Make sure your loan is portable
If there is any chance that you will move house during the course of your loan (and let’s face it, there is a strong chance), make sure that your lender will allow you to transfer your loan to a new property and that it won’t charge you the earth for the privilege.
Be careful. If you sell up and buy a new house, you could find yourself down thousands in discharge costs on your old loan and establishment fees on your new one.
16. Avoid bridging finance
Someone once said bridging finance is so called because it allows you to “pylon” the debt. The joke’s appalling, but so is bridging finance. Unless you get your timing right you could find yourself with two home loans at the same time – with the bridging finance element costing you an extra couple of percent premium on the standard variable rate.
Consider using a deposit bond or selling before you buy, as it will be much more cost effective for you than another loan.
17. Choose the loan that suits your needs
Choosing a loan is about knowing what you want. Draw up a table of potential home loans and rank them. Make a list of all the features that are important to you and rank them according to importance. Give each feature a score out of 5 – one for unimportant right through to 5 for indispensable.
Use this technique for ranking the loans on offer and pretty soon you’ll see the one that’s right for you. Remember, different loans have different purposes so you need to match a loan to your need. Taking out an interest only loan suitable for investors if you are planning to live in the house is just foolish.
Ditching the features you don’t need can save you up to 1 per cent on the interest rate of your loan. Over 30 years that’s a whole lot of money you’ve just saved yourself.
18. Don’t be afraid of smaller lenders with cheap rates
Since the advent of the mortgage managers over the past five or six years there’s been a lot of talk about smaller and “non-traditional lenders” and how they have forced interest rates down. With the property boom, plenty of opportunities sprang up for smart lenders with low fees willing to take on traditional lenders and many have done very well indeed.
Some borrowers worry about what might happen if their lender gets into financial trouble. Keep in mind that you’ve got their money – so don’t worry too much. There are some smaller lenders whose names might not be readily familiar but whose rates might be enough reason to get in touch.
Be wary, however. Some of these smaller lenders can have huge hidden fees and charges. It is true that the interest rate might be much lower, but in many cases, they exit (or penalty) fees can be very high if you refinance or pay off your mortgage in the first couple of years. Of course, if you’re planning on staying with that lender for some time, then these fees will not impact your pocket at all.
Car Loans For People With Fair Credit
If you have fair credit and it not have anything tragic on your credit report, then there are a few good sources that you can use to obtain auto financing. If you have tried to obtain a car loan at a local dealership or two, have been turned down and are looking for an approval and a good interest rate, then there are sources that can help you in obtaining a “fair credit auto loan“.
If you have a really good credit score, you can go pretty much anywhere that you want to, to obtain a car loan.
If you have a fair to marginal credit rating, then you can expect to pay a slightly higher interest rate however, there is absolutely no reason that you should have to come up with a down payment to put down a car. The only reason you would ever need a down payment is if the price of the car far exceeds the loan value. If the price of the car exceeds the loan value by very much, then you are getting a good deal anyway and should avoid that type of deal. In other words, don’t give a dealer a down payment because you don’t have to. It’s simply a matter of understanding the system.
If you have fair credit, the easiest and fastest way to obtain a car loan is online. It used to be that only the major lenders accepted applicants on the Internet, now second chance finance and secondary lending sources have programs that allow you to get started online.
One thing to keep in mind, is that although there are many offers for car credit online, make sure that you’re dealing with a reputable source. All companies and websites are certainly not created equal and it’s in your best interests to use sources that are reputable.
VA Home Loans and Guidelines For Bankruptcy and Foreclosures
I receive a lot of VA loan questions in regards to bankruptcies (BK) and foreclosures. Most of the time the questions are determining how long a borrower has to wait after their bankruptcy before they become eligible for a VA loan? Or is there anything they can do while they wait to help their chances of getting approved for a VA loan once the waiting period is up. So let’s dig in because as of right now the VA underwriting guidelines are much more flexible than conventional or FHA loan guidelines.
Chapter 7 Bankruptcy
First, a chapter 7 bankruptcy involves a complete discharge of debtors. Once the petition is file and accepted by the court and the BK is finalized the borrower is released from liability from the creditors. Generally, with a chapter 7 bankruptcy the VA underwriting guidelines require a 2 years waiting period from the discharge date of the bankruptcy before financing becomes available. There are, however, certain uncontrollable circumstances such as medical conditions or job loss that allow for financing 1 year after the discharge date but these are very rare. To contrast this with conventional guidelines at the time of the article Fannie Mae is now requiring a 4 year waiting period after a chapter 7 BK.
Chapter 13 Bankruptcy
A chapter 13 on the other hand is called a wage earners plan. A trustee is appointed from the court and a repayment plan is negotiated. A veteran may actually be eligible for a VA mortgage while in the chapter 13 bankruptcy; but will need to have at least made 12 on time payments and have approval for the loan by the court trustee. Also, after the chapter 13 is finished the veteran borrower is eligible immediately. Fannie Mae requires a 2 year waiting period after the discharge.
Foreclosure
The VA guidelines state the foreclosure period follow the same rules as the Chapter 7 Bankruptcy. Basically, the veteran borrower needs to wait 2 years. Fannie Mae requires a 5 year waiting period now after the completion of the foreclosure, ouch.
Tips for after a Bankruptcy
As a top VA lender that has dealt with their fair share of bankruptcies we’ve put together a few tips that borrower can put to go use.
I strongly recommend after the bankruptcy has been discharged that you mail in a full copy of your discharge paperwork with all of the appropriate schedules the three credit bureaus Equifax, Experian and TransUnion. Often time some of the accounts included in the bankruptcy won’t reflect that accurately.
I also suggest you start by pulling your credit at least once a year from each of the nationwide consumer credit reporting companies. Keep track of what’s gone on and make sure there are no inaccuracies by the time you are ready to apply for a VA loan.
In addition, if you don’t have any remaining creditors after your bankruptcy we strongly recommend reestablishing your credit if you have not already done so. Sometimes a borrower with a lack of credit is just as hard as approving borrowers with poor credit. And of course always, always, make your payments on time!
Of course the VA loan bankruptcy guidelines could change or be amended in the future but so far most of the VA guidelines have stayed the same.
Home Refinance Stimulus Package – Obama’s Stimulus For Mortgage Refinancing and Loan Modification
Obama’s government has come up with home refinance stimulus package and loan modification programs to help all the needy owners in avoiding foreclosure. This program is designed specifically for all the borrowers who are facing financial hardships as they are not in a condition to repay the loan. The home refinance stimulus package and loan modification would cover as much as 9 million mortgages and the government would spend $75 billion for helping the homeowners.
Obama’s Stimulus Package has 2 main components:
1. Refinance
2. Loan Modification
Let us discuss each one of these components in detail:
1. Home Refinance Stimulus Package
· In this program the two most powerful mortgage lending agencies of the government Fannie Mae and Freddie Mac would refinance the home loans of all the owners who owe much more amount to the bank than the actual value of the house. The only condition for this package is that the mortgage must be a guaranteed one by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount, you can gain advantage of the program.
· But there is one major condition joined with refinance stimulus package and that is; the offer is only valid for the properties which are used for residential purpose. Any property which is lying like a building and no one is living inside, will not qualify for Obama’s home refinance stimulus package.
2. Loan Modification Stimulus Package
· There have been special incentives that Obama’s government is going to provide to all the lenders for doing loan modification on the existing home loans of the borrowers. According to this program, the homeowners can get rid of foreclosure by getting it done. The main features of this program would be; interest rate would be reduced and it can go down to 2% only, tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.
· With loan modification, lender will also take care of the total monthly payments that a borrower is making and it would not increase than 31% of the total monthly gross income.
Posted in Refinance Loan Articles | 
Tags: Modification, Mortgage, Obamas, Package, refinance, Refinancing, Stimulus | 
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