Category: Home Loan

Taking Care of Your Home

When it comes to owning a home, there’s a lot to take into account. This is after you’ve purchased the house and moved in, which is the hard part that we all dread, so consider it a blessing and a curse. The former, because the hard part is over, the latter because there’s still plenty to do. However, it’s all worth it in the end, as I think we can all agree. After all, home is where the heart is, and no one’s heart is really home when we’re paying way too much to live in a lousy apartment, so our own little slice of heaven is exactly that, a sanctuary to call our own that shelters us from the elements and from the rigors and obligations of daily life. Therefore, it’s in your best interest to do what you can to make your house a home. Here are a few things to consider after the dust of moving in finally settles.


First and foremost, keep your house clean. This largely goes without saying, but considering mental illness is on the rise thanks to capitalism, it can be hard for many of us to muster the energy for tasks around  are not strictly necessary. However, this is bad for a few reasons, and they’re somewhat obvious. However, they’re important enough to bear repeating. Obviously, a messy home isn’t going to improve your depression. This isn’t news to anyone, but that’s the name of the game when it comes to depression. Depression is like a self fulfilling prophecy, because the illness often leads you to forego certain productive tasks that would improve your mental state, or at least preserve it. Instead, your mental illness sort of makes you activate your own triggers through negligence. So, if you’re ever going to feel at home in your home, keep it tidy as often as possible. Another thing to consider about cleaning your home is company. We’re not all social butterflies. Especially now, with depression, of course, and social anxiety on the rise. However, we all have company some time, and when we do, we want them to feel at home. But, how can they when we don’t because of the mess? Therefore, before you bring your eHarmony date home for dinner, make sure your home is neat and tidy. By the way, this merely means clear of garbage, dirt, and the like. Clutter is fine and, in fact, a sign of intelligence, allegedly. If nothing else, some of us are simply more organized when we don’t organize our surrounds, so to each his own there.

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Home Equity Loans

Home equity loans are so named because they permit homeowners to the equity of their property without having to sell it. The equity of a home is calculated by deducting what is owed for the home from its market value. Home equity loans were once called 2nd (or even 3rd) mortgages. Home equity increases in two ways. The first is mortgage payments that reduce the amount that you owe for the home and the second is market appreciation over time that increases the gross value of the property you own.

Home equity loans carry low interest rates because all moneylenders view this as a very stable form of investment on their part. Even in times of a struggling economy, there is always the hope that eventually the prices will rise again. Mortgage lenders also have access to agencies like the Federal National Mortgage Agency that help to reduce the risk by moving it away from the lender. However, note that while the interest rate on home equity loans is lower than other types of loans, it is still higher when compared to the first mortgage. It is also possible to convert home equity loans into first mortgages through refinancing.

Reverse mortgages are similar to home equity loans as they to provide homeowners with the cash value of the equity. The difference is that home equity loans are paid out in a lump sum while reverse mortgages are paid out monthly or quarterly. Senior people who would like some extra cash use reverse mortgages but they do not wish to sell their home. In such a case, upon the death of the individual the estate sells the home or the title passes on to the mortgage lender who can sell that property.  More details in our post here:

In case you are interested in home equity loans but the equity value of your home is too low right now then you can always go for the 125% equity home loan.

The 125% equity home loan is like a 2nd mortgage that permits you to take a loan of up to 25% more than the value of your home. This means that if your home is valued at $200,000 and the pending mortgage you have to repay is also $200,000, then you can still take a loan of $50,000.

Many lenders offer 125% home equity loans, and you can easily find them on the Internet. Note that lenders will have their qualifying criteria and loan terms. Most of your options will depend on your credit score. This is not as general as good or bad credit score but there will be limitations like you must have a minimum credit score of so much. Credit score will also decide the maximum amount of 125% home equity loans that you are offered.

Most of the time you will not be required to get a property appraisal for 125% home equity loans. Also, lenders will use the purchasing cost of the home as its equity value rather than current value if you have been living there for less than a year.

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Getting A Home Loan After Declaring Bankruptcy

The recent economic down-turn had resulted in many people filing for personal bankruptcy. Many of these individuals fear that this meant the end of their dream of owning a house. They think that with a bankruptcy on their credit records, no lender would be willing to finance their home purchase. The fact is, it is not impossible to get a mortgage after bankruptcy. There are some things to consider that help in improving one’s chances of getting a mortgage.

A home buyer can qualify for an FHA mortgage in as little as two years after a bankruptcy, and in four years for a conventional loan. After the waiting period has passed, financing for a home purchase can be sought. During this waiting period, things can be done to improve one’s credit rating so that lenders will look more favorably upon the borrower.

Many factors affect the rate that the borrower can get on his mortgage if he or she has had to declare bankruptcy. For someone starting fresh from bankruptcy, the interest rates available will not be very favorable. Still, a lower interest rate can be obtained if a larger down payment is put down. Also, if bills have been paid on time since the bankruptcy discharge, that will be looked upon favorably by the lender. Improvement in the credit score is another aspect that the lender considers.

After the bankruptcy discharge, the credit report should be reviewed to make sure that every debt has been closed and discharged. Items to watch out for are debt items that remain open because some creditors may continue to report them. That can erode a person’s credit score even more.

A person can start improving his credit score by paying all of his credit card bills on time. One strategy is to open a store credit card that is unsecured and which carries a high interest rate and pay for all charges in full during the grace period. The high interest rate will not matter because the borrower will not carry the balance over to the next billing cycle. The whole point in this is to build up positive credit activity so that lenders will see that the borrower can handle debt more responsibly now. One should only use less than 30 percent of the available credit.

When the borrower applies for the mortgage, he should be ready to provide all documentation relating to his bankruptcy. The process of applying for the loan is the same as the loan application process of borrowers who did not file for bankruptcy. The borrower just has to convince the lender that he is a good risk.

Getting a mortgage after bankruptcy is not impossible. The borrower will need to work on improving his credit score during the waiting period after the discharge. Proof of steady employment and income, a low debt-to-income ratio, and a low loan-to-value of the house to be purchased will all work for getting that mortgage. With some careful planning, the dream of owning a house can be kept alive.

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