The biggest world powers are facing uncertainty about the future in this era and the Canadian economy is no exception. This eventually has made the lending institutes to practice tough love with the loan borrowers particularly those asking for mortgage refinancing. Mortgage refinancing is basically for home proprietors who clear up all their mortgage payments, latest or pending ones, in order to get a new mortgage. The primary purpose behind this is to avail low interest charges as compared to what they are currently paying. Second reason could be that, while you were clearing up the mortgage installments another real estate appeared more feasible or valuable.
Why should you go for loan refinancing?
It proves extremely helpful since the saved amount can be utilized in purchasing other real estate properties, funding education, refurbishing your home or consolidating debt. The two main possibilities are briefly described below.
1. Refinancing to buy other investments
This is a good way to improve your financial condition. You can do this by taking out your home equity and do debt-swapping; it means transferring non tax-deductible debt into deductible debt. Since it is a difficult procedure, therefore a little assistance by an expert mortgage broker is simply inevitable. The decrease in the monthly installments can eventually lower the tax by 50% for those getting hefty paychecks.
2. Consolidate debt
Mortgage refinancing can be used by any Canadian citizen to pay monthly bills that are overflowing on your debit side. These can also be used to consolidate debts into a single payment at an interest rate that is lower than present one. Obviously your monthly payment will be decreased and you get your debt under control. A financial planner can lead you easily through this process.
● You must make sure that your credit report has steered clear of any negative entries. This increases your chances of getting qualified for refinancing. These negative records will lead to a poor credit score, which consequently won't enable you to utilize your loan in big investments, in case you get one.
● To avail a suitable bargain, try supplying all the necessary information to your broker, sincerely. This can happen if you choose to divulge all aspects of your current income and credit history.
● Do some homework and compare the mortgage rates to pick the lender who can satisfy you best. On your part, you also need to see the 'transparency' of the deal by reading the 'terms and conditions'. Beware of hidden costs in the fine print so that you don't end up paying more.
Lastly, you can take a sigh of relief and be thankful to your mortgage broker for helping you clearing up your debt.
Looking for consolidation loans and getting frustrated? Don't be, just visit this loans guide.
Monday, July 25, 2011
Thursday, July 14, 2011
Is getting a home loan easy
Getting a home loan is not difficult, but the outcome of the application process depends on a number of factors among which job stability, business ownership, level of income, amount available for down payment, funds deposited at a bank, and credit history, among others.
First, crediting institutions favor applicants with an employment history of at least 2 years. In the best case, the applicant has worked for the same employer for two consecutive years. Frequent job changes and employment gaps lower the chances of being granted a bad credit home loan. The borrower's credit history is also important and the better the credit rating, the more favorable the conditions will be. Lenders take into consideration the FICO score as to evaluate the ability of the borrower to repay the loan. While the formula for computing the score is a complex one, a number of factors are taken into account such as bankruptcies, judgments, pay history, collections, as well as residence and job stability.
It will not be difficult to obtain the loan if your monthly payments toward mortgages, auto loans, student loans, and credit cards are no more than 41 percent of your total gross income. The debt to income ratio is also important and generally, the less you have borrowed, the better the ratio.
The purpose of the mortgage loan will also determine how easy it is to obtain it. For example, if the borrower applies for a construction loan, the lender will usually require a down payment. Another requirement is a good credit rating. Down payment is not always required, and some lenders feature zero percent down mortgages. While getting a home loan will not be difficult, the repayment terms will not be as favorable. Even a down payment of 5 - 10 percent helps reduce the interest rate on a home loan. The type of property is also important when assessing an application for a home loan. For instance, applicants who seek to buy a condo or manufactured home will pay higher interest charges. Those who want to buy a condo or a 4-plex in a high rise may be required to provide collateral. Properties consisting of 4 or more units also require the provision of collateral.
Lenders are unwilling to lend money to borrowers who are overloaded with multiple debts, especially now, after the recent peak of foreclosures. Borrowers who own a house are favored by the creditors as they are more committed to repaying their loans. In addition, no-down loans are most often an option for borrowers with an excellent or very good credit history.
Borrowers who own a business may have to provide a history of the business, showing how long the company has been in operation.
First, crediting institutions favor applicants with an employment history of at least 2 years. In the best case, the applicant has worked for the same employer for two consecutive years. Frequent job changes and employment gaps lower the chances of being granted a bad credit home loan. The borrower's credit history is also important and the better the credit rating, the more favorable the conditions will be. Lenders take into consideration the FICO score as to evaluate the ability of the borrower to repay the loan. While the formula for computing the score is a complex one, a number of factors are taken into account such as bankruptcies, judgments, pay history, collections, as well as residence and job stability.
It will not be difficult to obtain the loan if your monthly payments toward mortgages, auto loans, student loans, and credit cards are no more than 41 percent of your total gross income. The debt to income ratio is also important and generally, the less you have borrowed, the better the ratio.
The purpose of the mortgage loan will also determine how easy it is to obtain it. For example, if the borrower applies for a construction loan, the lender will usually require a down payment. Another requirement is a good credit rating. Down payment is not always required, and some lenders feature zero percent down mortgages. While getting a home loan will not be difficult, the repayment terms will not be as favorable. Even a down payment of 5 - 10 percent helps reduce the interest rate on a home loan. The type of property is also important when assessing an application for a home loan. For instance, applicants who seek to buy a condo or manufactured home will pay higher interest charges. Those who want to buy a condo or a 4-plex in a high rise may be required to provide collateral. Properties consisting of 4 or more units also require the provision of collateral.
Lenders are unwilling to lend money to borrowers who are overloaded with multiple debts, especially now, after the recent peak of foreclosures. Borrowers who own a house are favored by the creditors as they are more committed to repaying their loans. In addition, no-down loans are most often an option for borrowers with an excellent or very good credit history.
Borrowers who own a business may have to provide a history of the business, showing how long the company has been in operation.
Wednesday, July 6, 2011
Do You Need Cashback Credit Card
With cashback credit cards, cardholders get back a percentage of the amount spent on purchases, and the cashback is in the form of refund or check. The amount of cashback is small compared to the total spending on the card. The more the cardholder spends on the card, the more money he gets back. Cashback credit cards are a good option for cardholders who pay the balance in full, avoiding interest payments. The interest on the outstanding balance can outweigh the amount of rewards if the bill is not cleared in full. A cashback credit card is also a good option for those who charge purchases rather than make balance transfers and cash advances. Some credit cards are further limited to some locations only.
An obvious advantage of having a cashback credit card is that the cardholder gets a discount on all items purchased. Cashback credit cards with higher credit limits can be used to purchase kitchen appliances, furniture, and other big items as to get a larger discount.
Those who consider applying for a cashback credit card should know that it usually comes with a higher interest rate. If there is outstanding balance on the card, the holder ends up paying more than if carrying a balance on a low interest credit card. The terms and conditions can change any time as well. This means that the categories of expenses that qualify for cashback may change as well. Certain limitations may apply to the amount of rebates, as the card may come with a ceiling amount. Even if money is spent only on approved cashback categories, the amount of earnings may be limited to a specified amount.
While many prefer cashback credit cards as a payment option, the terms and conditions should be read carefully. For instance, the credit issuer may require that certain amount is spent in one month to be eligible to get cash back. Alternatively, the qualifying amount may be limited to the first $1000 spent on the card. The cashback is not deposited into the cardholder's account immediately. The money will be credited within a period of 7 to 21 days. If the money is not credited, the cardholder has to claim it within a specified period of time.
Given that credit cards come with different terms and conditions, you need a cash back credit card only if you understand what is in the fine print and keep track of the accumulated cash back. Finally, keep in mind that while the credit card issuer may offer cash back, there are some limitations. Cash back is typically offered when you pay for dining, travel tickets, entertainment, groceries, and apparel.
An obvious advantage of having a cashback credit card is that the cardholder gets a discount on all items purchased. Cashback credit cards with higher credit limits can be used to purchase kitchen appliances, furniture, and other big items as to get a larger discount.
Those who consider applying for a cashback credit card should know that it usually comes with a higher interest rate. If there is outstanding balance on the card, the holder ends up paying more than if carrying a balance on a low interest credit card. The terms and conditions can change any time as well. This means that the categories of expenses that qualify for cashback may change as well. Certain limitations may apply to the amount of rebates, as the card may come with a ceiling amount. Even if money is spent only on approved cashback categories, the amount of earnings may be limited to a specified amount.
While many prefer cashback credit cards as a payment option, the terms and conditions should be read carefully. For instance, the credit issuer may require that certain amount is spent in one month to be eligible to get cash back. Alternatively, the qualifying amount may be limited to the first $1000 spent on the card. The cashback is not deposited into the cardholder's account immediately. The money will be credited within a period of 7 to 21 days. If the money is not credited, the cardholder has to claim it within a specified period of time.
Given that credit cards come with different terms and conditions, you need a cash back credit card only if you understand what is in the fine print and keep track of the accumulated cash back. Finally, keep in mind that while the credit card issuer may offer cash back, there are some limitations. Cash back is typically offered when you pay for dining, travel tickets, entertainment, groceries, and apparel.
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