Mortgage Loan ABC - Is Your Credit Working Against Your Mortgage Options?

Is Your Credit Working Against Your Mortgage Options?

Okay, now here's an interesting spin on an already risky product, let's give the bad credit crowd or the low credit score crowd, a chance to make an even worse decision, and finance a home they can't really afford and obviously will have trouble making on-time and dependable payments.
Sometimes, the products and situations that you see in the everyday world of researching these loans, is truly amazing and this is one of those classic situations. There are actually mortgage companies that advertise these interest only mortgage options for the consumer with the bad credit or slow credit record.
Now, what I'd like to know is why the mortgage company, in all good faith, would want to take a risk such as

this. It's risky financing mortgages for consumers with bad credit, even if you're financing with good solid collateral, and it is well within their means to pay. You take the consumer and the mortgage loan outside those realms of operation, and you're just simply a problem waiting to happen.
Maybe we should have an agency that's known as the "mortgage police" and when there's a clear and evident violation of just good sound common sense, a whistle blows; the computer locks up, and now enters the mortgage police. I truly believe the consumer, if not the mortgage company would be a lot better off, especially when the consumer has time to really absorb the basic facts about interest only mortgages, and the mess they can make of your finances; in the case of the bad credit consumer, the further mess they can make of your finances.
With all the government control that regulates the mortgage loan industry, and all the statistics that are published about the consumer with a bad or slow credit rating, who do you suppose thought it would be a good idea to give them an interest only mortgage, that they more than likely will have further trouble paying? You wonder if Alan Greenspan is aware of situations like this, and if he takes it into consideration when raising the prime lending rate? Do you suppose there's a number factor for the "really going to default on these mortgages" segment of his equation that determines our prime rate?
Then you have the individual who simply has a low credit score because he has too much credit on revolving charge cards, store cards, etc. How does this affect his or her ability to get a loan? Well, it doesn't necessarily prohibit their ability to secure funding, of course not. What it does accomplish, and this is where the mortgage and lending companies have decided to make a lot of profit, is up the qualifying interest rate. So, if you're credit score is low, you will pay a higher rate of interest. You can still obtain the mortgage, but it will be at several points higher than an individual with an excellent credit score.
As our country spirals ever further into debt, (for if you bother to read any of the headlines lately, you know that we are at the lowest point ever in home mortgage equity. Savings are at a negative balance, and we continue to spend, spend, spend) we do not attempt to encourage a more saving attitude in our consumer advocacy branches of government; we make it easier to spend more. With the passing and implementation of the new bankruptcy laws, I believe we will begin to see even more Americans in trouble with their finances, and offering them more credit, interest only options, and second mortgages does not serve them well.
Let's hope Alan uses more foresight and plain good business sense than our mortgage loan brokers, especially the ones that came up with this genius idea!

Mortgage Companies: Specialty Guys
Let's talk about the specialty guys, the mortgage interest companies. Why do they exist in what do they do for the average consumer? Actually a lot. Mortgage interest companies exist for the pure and simple reason of originating mortgage loans. ...

Home Equity Lines of Credit
Alright, you've been a homeowner for some 10 years now, and you've decided it's time for improvement and expansion. What is the best way to obtain the funding for home improvement projects? A home equity line of credit is often the most feasible...

PMI and the 1998 Homeowner's Act
Let's first define what private mortgage insurance actually is, and why you might be required to purchase the insurance. Private mortgage insurance is an insurance purchased to protect the lender, not the borrower. The borrower however pays for...

Mortgages for the Investor
Not everyone that applies for a mortgage loan is a homeowner seeking to purchase their dream home, or their first home, or even their second home. Some of the mortgage market centers around individuals who invest in property for the purpose of...

Is the 20% Down Requirement Still Alive?
Today more than ever, a generation of homeowners will increase their debt to equity ratio by more than 30%; what has happened to increase the debt and decrease the equity? Many of the mortgage loan products available today do not require a down...

This site is a member of WebRing.
To browse visit Here.

Mortgage Loan
◦ 5 Scams - Countdown of the most extreme
◦ A Lending Hand - Only Good Credit Need Apply
◦ A Risky Proposition - How You Score Matters
◦ APR, FICO, HELOC - The FAQ's on these Little Initials and More
◦ Asking the Right Questions before Signing a Loan
◦ Balloon Payments Full of Hot Air?
◦ Case in Point - Negotiating Mortgage Points before Signing Anything
◦ Closing the Deal: Plowing through the Mortgage Paperwork
◦ Crossing that Bridge Loan when you come to it
◦ Don't Come in Second when Shopping for Reasonable Second Mortgage Terms
◦ Don't Lose Your Shirt or Your Home - Keep an eye out for crooked mortgage companies
◦ Don't take it personally-What to do when you are turned down for a loan
◦ FICO: Your Personal Financial Score Card
◦ Friends Don't Let Friends Loan Money:
◦ FYI on PMI - General Information on Private mortgage insurance
◦ Give yourself a little Credit:
◦ Glutton for Punishment? Co-sign a Loan
◦ Go for Broker: A Mortgage Broker Can Pay Off for You
◦ Government Grown Loans - The Lowdown on FHA and VA Loans
◦ Highway robbery - How to avoid getting taken advantage of in the loan process
◦ House Rich and Cash Poor - Buying a home that you can afford
◦ How do you Rate? Credit Reports Tattletale on your Finances
◦ In a Fix: Unsurprising Mortgage Payments you can Count on
◦ Kids in College Can Be a PLUS - Parents, Know your Education Funding Options
◦ Lending a Hand: How to Help Family financially but not get taken advantage of
◦ Lying about loans - Legality of using loan money for something other than its purpose
◦ More house than you need? Shop around before signing
◦ Mortgages Can Be Taxing - What You Should Know about Closing Costs and Fees
◦ On the Road Again: Advice about loans for RVs and other recreational vehicles
◦ One size does not fit all - choosing the right loan for you
◦ Owning vs. Renting - The Big Debate
◦ Pay them off - The advantages of paying
◦ Payday Loans REALLY Make You Pay in the End!
◦ Pre-approved for a loan? Don't get your hopes up
◦ Ramifications of Refinancing
◦ Scam is a Four-Letter Word in the Mortgage Category
◦ Score High and Keep Interest Low - The Ins and Outs of Credit Scoring
◦ Shop 'til the Rates Drop - Looking for a Great Mortgage Interest Rate
◦ Speak the same language - Learn the lingo of loans
◦ Study your Options on Student Loans
◦ Take Note of the fine print on your mortgage papers
◦ The ABC's of Amortization
◦ The Lowdown on Loan Options
◦ The Mystery of Mortgages
◦ The Payoff of Student Loan Consolidation
◦ The Pros and Cons of Consolidation
◦ This Option may not cost you an ARM - Consider your Options with Adjustable Rate Mortgages
◦ Upside Down - Avoid Owing More on your Loan than the Value of your Car
◦ When disaster strikes - Find out your options BEFORE something happens
◦ Buying or Selling, is the Mortgage Your Only Option?
◦ Equity and Your Home, A Hidden Asset?
◦ Fannie Mae and the Home of Your Dreams
◦ Financial Planning and Interest Only Mortgages
◦ Government Approved Mortgage Loans
◦ Home Equity Lines of Credit
◦ How Does Fannie Mae Work?
◦ How Real Estate Drives the Interest Only Mortgage Market
◦ How to Shop for Low, Interest Only Mortgages
◦ Interest Only and Credit Card Debt
◦ Interest Only In Your Best Interest?
◦ Interest Only Mortgage versus Balloon Notes
◦ Interest Only Mortgages: A Risky Real Estate Move?
◦ Interest Only Mortgages and the LIBOR, What is it?
◦ Interest Only Mortgages and the Young Professional
◦ Interest Only Mortgages for the Wealthy Investor
◦ Is the 20% Down Requirement Still Alive?
◦ Is Your Credit Working Against Your Mortgage Options?
◦ Middle America Goes Upscale on Interest Only Options
◦ Mortgage Companies: Specialty Guys
◦ Mortgage Interest and Your Tax Liability
◦ Mortgage Products: The 15 FRM
◦ Mortgage Products: The 15 Year ARM
◦ Mortgage Products: The 20 FRM
◦ Mortgage Products: The 20 Year ARM
◦ Mortgage Products: The 30 FRM
◦ Mortgage Products: The 30 Year ARM
◦ Mortgage Products: The Adjustable Rate Mortgage

A Home Mortgage Loan Calculator Helps you Determine Affordability of a Home