Should I Consolidate All My Rental House Loans?
Loans are there to make our life a bit easier. But, what if those loans become our headache? If you are a person with number of loans to pay off and is struggling to pay them back, then consolidation of the loans is a good option for you. Consolidation of the different loans makes the whole repayment thing manageable. When it comes to consolidation while you are on rent, you need to find all the nooks and corners before you go for it. You may not want to consolidate if all you can qualify for is commercial hard money loans due to the high interest rate.
Let’s know about debt or loan consolidation
Before you go for a loan consolidation, you must first know what it actually is and how it works. The main intention of getting a loan consolidation is to combine all the various loans, which a person is having trouble in managing, into one. Consolidating helps you to pay your monthly bills and loans in a single payment. This in turn helps to curtail down the interest rates that you are paying against so many loans. Thus, it is in a way saving your money.
Consolidating loan means you can even have more time to make the repayments. You might be finding it tough to make the huge payments every month. Therefore, through consolidation you can lessen the amount you pay every month. Well, it should be remembered that with the decrease in monthly payments, you are actually paying larger amount of interests.
If you are renting a home, then it’s hard for you
Consolidating loans is sounding great as we are looking at the benefits of it. But it might not sound that great if you are staying at a rented house. Here follows the reason:
- Before you step ahead for a consolidation of loan, you must know that it can affect your credit scores. You already know how much it is important to maintain the credit score for taking future loans. When you are applying for a consolidation, which means a hard inquiry is likely to happen that will definitely affect the credit score. And if you are having a bad score in your credit, then you might have trouble in getting rented home or any other loans in the future.
- You might think that consolidating loans will help you to make payments easily. Well, remember that you need to make the payment of the consolidated loan on time as you have done with the other loans. If you fail to make the payment on time, then you will need to pay huge amount of interest like the general loans along with a late fee.
- Before you plan to consolidate your loans you need to change your habit of spending your money unwisely. Though you are a tenant you need to maintain the underlying issues of staying in a rented house. Therefore, if you are a spendthrift and you spend on eating out more, your plan for consolidation of loans will be a failure.
Therefore, if you have planned on consolidation of loans you need to consider the above points first. Make wise financial decision and spend wisely. This will save you lots of money for your future use.
As the buyer, getting a mortgage loan with a bad credit history can be difficult. Your financial situation need to fit the neat little boxes implying you should have a predictable salary that may be documented with the paycheck stub or W-2 forms, an employment history without interruption or a gleaming credit score. It is seen that the cost of buying a property adds up for the buyer. Buyers have to pay the loan-acquisition cost for the services used in between the escrow process along with the down payment. Under such situation, buyer can ask a seller to credit certain specified amount to the buyer at the closing in order to help with the expenses. You should consider the credit of the buyer in order to decide how much the person is eligible to receive as loan and to cover the risk.
The working of the seller financing
If the buyer is unable to procure the loan, it is the seller who takes loan for the buyer and allows him to buy the home. There is a promissory note involved in between offering an interest rate, stating the repayment schedule and the consequences of the default. The buyer is supposed to send the monthly mortgage payments who earn an interest on the loan and at higher rate that he may get elsewhere. If seller sells the loan, the buyer sends mortgage payments to investor who buys the loan. The seller finances the buyer often for short term like 5 years with the balloon payment which remains due. The buyer refinances before the end of the tenure. So, when mortgages are hard to procure, seller financing is the easiest way to pay for the home.
The reasons for seller financing
Seller financing is more common in the market. Basically there are two reasons. The interested buyer may fail to procure a mortgage and so the seller suspects his payment ability. Well-qualified buyers having trouble in securing a loan from financial institutions may take assistance from the seller. Selling gets more difficult when credit is tight. Home sellers consider the unconventional modes. Most of the sellers are afraid to sell a property on seller financing. They either do not have money or are scared to finance the buyers.
Considering the credit of the buyer
Credit score is an important factor. You are lending a large amount of money to a person and it is the credit score which may allow you to assess the past financial performance of the person and the financial commitment. The seller financing the loan must consider the credit since that will give the indication how the note will be paid. Depending on the total amount refinanced, the seller can check the financial statement to evaluate if he has the necessary equity or income to clear the note and still fulfills the financial obligations. The seller is supposed to measure out the risks involved in refinancing.
Since the term of the note has to be adjusted as per the risk involved in refinancing, the seller must consider the credit of the buyer. Check out the financial track record of the individual prior to lending anything. Anyone having a credit score under 600 must not be lent money with three rating agencies.
Are you aware of the foreclosed apartment that may help you to make money?
Foreclosure apartments may be a new term, for you or maybe not. But you may have missed some benefits related to it’s which may, in turn, give you some extra beneficial offers. Mainly the definition of the foreclosure apartment states that these are the apartments or houses which have failed to give back the payments of the loan amount, and thus the owner is a defaulter. Naturally on ending the fixed time period on the legal notice, the property goes to the hand of the lender and then they sell it at a very cheap price rate. Thus, the buyer who is buying the property gets a lot of benefits in turn.
Tips on buying and choosing the right one
Now the question may come to the mind of many that are there really any kind of benefit in buying the foreclosure apartment. Do I get the best thing at the right price or have I been cheated? Then here we share some tips for buying foreclosed apartments.
First is to get the list of the foreclosure apartment or the properties. You may get a list very easily from any official departments that will provide you the public records. And getting this is totally free of cost without losing a penny from your pocket. Besides you may also search the websites which will give you the list of the properties that are being given by the banks and the other money lenders companies. Detailed information is being provided about and each and everyone so that the viewer has no problem in locating or getting a proper view of the property. The detailed information may include the address, the telephone number of the agents, the pending loans amount and obviously the price of the foreclosure property. Local newspapers also provide the same as the notice for sale.
Benefits of buying the foreclosed properties
Now we talk about the benefits of buying such properties. Normally these properties are being sold less than the market value and hence it is the first advantage that you are having. Getting a place or property in a good location can be beneficial to you in any way or other. Additionally getting them in less than the market value is the greatest benefit than anybody can expect from any property investment. The lenders will just take the actual money that they have given, but the property may give you the extra money that you will be getting from a prospecting real estate asset. So you can sell them in the future with a higher rate that obviously is good news for your investment plan. Additionally, low-interest rates, zero prepayments of loan amount are other benefits that are making you on the profit side.
Choose the right one to get high profit
But for these, you have to choose the right one from a reliable foreclosure property list. Getting the right property will surely bring you money but a wrong choice will give you a bad fall in the investment plan. So before you take the high jump in the property issue check them seriously first.
When you are about to close a deal to purchase a house, your dealer or the attorney you are working with, might recommend you a few insurance covers that would ensure your legal status over the house. Among them is a type of insurance cover call the Title policy. This is not a very expensive insurance cover but it does add to the amount you are paying for your house. There has been a long debate regarding – is Title policy a scam or a healthy precaution?
What Is A Title Policy?
Before we step into that debate, it is important to know what a title deed is actually about. When you are purchasing a house, especially when it has belonged to someone else before, there is a chance that they might have more than one owner. The problem you might face because of this is that, the other owners might later on file a case against you saying that they are the owners of your property. This title deed is the legal contract that helps you to stay safe from such allegations. It is done between the previous owner and the new owner, in order to show that the title of the property now belongs to the new owner.
It Is Beneficial To Have Title Deed?
There are definitely some benefits of having a title deed. The biggest one is that it helps you to stay safe in case anyone else tries to say that the property belongs to them. There have been certain cases when someone has been sold a property by another individual but in the future third party has declared that that property belongs to them. If you have the title deed then you can have substantial proof that the particular property belongs to you as it has been signed off by the previous owner. This not only indemnifies you against future litigation’s but also gives you a peace of mind regarding the safety of your ownership.
Or Is It A scam?
Many people are of the opinion that these types of policies are just the way of advocates and insurance companies to siphon money out of an individual. They consider this whole business of insuring, a total scam. The advocates and the insurance companies do earn from such deals. But if you are to consider the actual rate of casualties in such cases then you will see that such types of problems of having to fight litigation cases is actually common. Since the amount payable for such title policy is actually quite less, you can easily go for the policy.
There is a high chance that you will not be required to use this policy at all. But since they say, it is always better to be safe than to be sorry, you should opt for such a cover, But make sure that the lawyer does not line his own pocket and charge you an exuberant rate. Be smart and do some good research while you are choosing a title policy.