How Do Reverse Mortgages Work - 0 views
started by Marty Trevino on 02 Mar 12
started by Marty Trevino on 02 Mar 12
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started by Marty Trevino on 02 Mar 12
Having a reasonable amount of income and short term credit is no longer up to par to secure loans with reasonable terms. Most people cannot walk in, apply for a loan, and stroll out with a brand new car or home in one afternoon with our current lending market. Applying for loans now starts with an extensive application process that can drag out for those lacking excellent credit and down payments. Understandably, lenders are no longer willing to take risky deals. Most people now find it harder to get loans they want, but most will eventually get accepted.
The key to securing the loans you want for a new car or home is to take steps to make yourself look more desirable to lenders. You don't want to accept any loans unless they have favorable terms. No one can guarantee that you will be accepted for a favorable loan, but there are five things you can do to improve your chances.
Improve Your Credit Reports
Never apply for a loan before checking your credit report. Make sure you check a copy of all three credit bureau reports. Not all businesses report their data to all credit bureaus. It is typical for all three of the different credit reports to vary in some manner. Your FICO scores could also vary from one credit reporting to another.
Most loan organizations and banks will check with all three credit reports when deciding if you are suitable for one of their loan programs. Ideally, your FICO scores will be at least in the 700s, though you want them to be as high as you can get them. When you sink below 700 even for one score, you appear to be a much higher risk for lenders.
Take action right away to clear up any misreported items on any of your reports. If you have small unpaid debts, make good on them and request the credit bureaus be changed. If the credit bureaus cannot be updated right away, ask for something in writing stating the debt has been fulfilled. Delivering those letters to lenders may give them more respect for you.
Get Rid of Outstanding Debt
If you have a lot of credit card debt, now is the time to start paying it off. Lenders look for people who have more available credit than used credit. This means that your account balances are very low, and you have some open credit that you are not using. To get that profile, you want to pay off as much of your overused debt as possible while keeping the accounts open.
Never discontinue your accounts! If an account requires you to make a purchase every now and then to keep the line of credit open, do it but pay the charges off immediately. Lenders look for applicants who have free credit because it shows that other banks have taken a risk on them, and they are using the credit with maturity. High balances reveal the opposite, by representing that you are spending beyond your means or are not using credit responsibly.
No More Credit Cards
When you apply for an additional line of credit, it will show up on your credit report. They can see the other inquiries to your credit and realize you are shopping for credit lines. You typically will not be approved for all of those credit lines, but it doesn't send a good sign to lenders. It is in your advantage to reserve the application for lenders that you really want to secure credit from.
Prove Job Stability
How does a reverse mortgage work is a quite common question nowadays. With a tougher economy, retirees are seeking a good way to make their budget stretch. If you are in a bit of a tight spot monetarily, investigate information available on a reverse mortgage and find out if it can help you.
The longer you have been at the same job, the better off you are going to be when asking for loans. Lenders will put more trust in an applicant who has a consistent, stable work history than someone who has changed jobs a lot or has just started working after a long period out of work. Be prepared to establish that your employment is stable, so lenders have faith in you.
Build Up Your Down Payment
Finally, lay down as much of your own money toward this purchase as you can. If you are ready to put some of your own hard-earned money down, then lenders feel more relaxed about putting their own money down. If you cannot invest in yourself, why should anyone else?
Note that most people will have to wait before applying for loans while they work on one or more of these points. That slows down the process of making the purchase you want to make, but it could save you from getting denied the first time you apply. It is better to get ready ahead of time so you look like a good prospect on paper. You do not want lenders to see you as a risk.
how does a reverse mortgage work