Do you know what a secured loan is? A secured loan is a loan in which the person wishing to borrow has to give some sort of security, characteristically their property. A loan against a building that is owned outright is called a first charge, whereas a loan secured on a property that already has a mortgage is called a second charge.
The amount you can borrow usually ranges from 3.000 pounds to 50.000 pounds, even though you can borrow sums up to 100.000 pounds, over a period of between 3 and 25 years. A penalty may be charged for early repayment of the loan, a fact you should check during the application process.
You may even be able to borrow up to 80 per cent of your property’s value, although since the credit crunch, this is now unlikely.
What are the advantages of a secured loan? It’s usually easier to acquire a secured loan than other forms of credit, largely because your borrowing is protected by the equity in your property. Secured loans are a way of borrowing large amounts that would usually be impossible by way of unsecured loans and offer the option of paying back smaller amounts over a longer time.
They are a costly choice but, if other channels of credit have dried up, and you need a large amount of cash over a long repayment period, or you have a poor credit rating, then one of these may suit you. There are still some good secured rates available on the market, providing you have a fairly good credit score.
What are the disadvantages? If your credit score is good, then you would be much better off opting for less risky credit, from avenues such as unsecured loans, credit cards offering balance transfer, remortgaging or looking for an extra advance on your existing mortgage. These options all tend to be cheaper.
For people with poor credit history, secured loans can provide an option. A borrower can ask for a 20.000 pound loan protected against a building worth 250.000 pounds over a period of eight years, with a poor credit history, and still get loans from a variety of providers, but the interest rates would be relatively high.
Debt specialists have long said that secured loans are stretched over unnecessarily long periods and are expensive. This makes it longer for the borrower to escape their debt and they could be at risk of losing their home throughout this period.
If I want a secured loan how do I apply? The options for secured loan clients have reduced over the last year: there are now only seven top providers left in the loans market, this has dropped from eighteen providers in twelve months.
Bad press has hit these companies hard – secured loans are quite often seen as a risky enterprise – and a falling property market, has made lenders more cautious about securing loans against property. You can go to a bank to apply for a secured loan, apply over the phone or visit a website. By using the internet you are able to source lots of options.
Although the first part of your application is quick, you have to be given a seven day consideration time to ensure you fully understand the loan agreement Your credit history, the amount of equity you have in your property and your ability to repay the loan will determine the rate you have to pay for a loan.
Will I have any kind of protection? Yes, you will be covered by the Consumer Credit Act 2006, a revised version of the previous 1974 act which only covered consumers up to 25.000 pounds. This revised act means that secured loans clients taking out bigger amounts have been covered since the 6th of April 2008. All loan providers are assessed on their conduct by the Office of Fair Trading. The Office of Fair Trading has the right to fine businesses for unethical conduct and can contest individual consumers’ cases.
A Securities Loan (not a margin loan) allows investors to borrow against their securities portfolio to create liquidity while staying in the market and enjoying the benefits of dual appreciable assets at once. Margin loans have been around forever but they are expensive and risky and they are usually maxed out at 50% of the portfolio value. On top of that, they can be called at any time. Why not explore borrowing up to 80% of your portfolio without all the risk?
If you need money to complete your development project or acquire a distressed asset for pennies on the dollar and you own securities (stocks, bonds, mutual funds and other securities) you or your client should consider a securities loan. Distressed assets are trading for pennies on the dollar and if you have the experience to manage and stabilize them then why not borrow against your securities to acquire them? Most people borrow against the home they live in. And they borrow against their business property. And against the car they drive. So why not borrow against your securities especially since the terms are so good?
Benefits Of a Securities Loan:
– Interest rates between 4.0% and 6.0% – Fixed Interest Only
– No credit or FICO requirements – In fact, you should not be asked for your credit score at all
– No minimum income requirements –
– Interest-only loan payments
– No upfront, application or due diligence fees
– Funds may be used for any purpose, personal or business use, including real estate purchase, business expansion, etc.
– No personal guarantee (a non-recourse loan) . The loan is collateralized by the pledged securities only – not by real estate and not by other personal property
– No residency or citizenship requirements – foreign nationals qualify for this loan – world-wide
– Stocks held in some foreign stock exchanges qualify – call for details
– Close in a matter of days
– Minimum loan size – $500,000 – no maximum
– Terms of 3, 5, 7, or 10 years
– Borrower keeps all dividends and upside market appreciation of the securities
Securities Backed Lending may be the funding solution you’ve been looking for!
Remember, this type of non recourse lending allows the borrower to use their investments to obtain funds for personal or business use. Using your investments as collateral you are able to borrow money with low interest rate financing.
Categories: Uncategorized Tags: appreciable assets, business expansion, business property, credit score, distressed assets, fees funds, loan payments, personal guarantee, real estate, securities, securities loan, securities portfolio
Credit scoring is the statistical technique of assessing a borrower’s creditworthiness with the aid of credit scoring models. The first scoring model was developed by Fair Isaac Corporation (FICO) and till the year 2006, credit scores were synonymous with FICO scores. In the year 2006, the three credit bureaus, viz. Experian, Equifax and TransUnion introduced the VantageScore as the main competitor to the long dominant FICO credit score. Although the credit bureaus still compute FICO scores, since February 13, 2009 Experian’s FICO scores are no longer available to the consumers. However, lenders are still provided FICO scores computed by Experian and the other credit bureaus. The newest version of the FICO scoring system, known as FICO 08, is also available to the credit bureaus since July, 2009.
What Is a Good Credit Score Range?
The article, , has dealt with the following questions pertaining to FICO scores, mainly, ‘what is a score range‘ and ‘what is considered a good credit score‘. Hence, people may be interested in referring to the aforementioned article since the FICO 08 model evaluates the factors considered by the FICO model and more. For a quick recapitulation, the latter considers 300 – 850 as the credit rating range, with 850 being the highest credit rank possible. Previously, a credit degree over 720, or in some cases over 680, was considered good, but in the current scenario credit score between 780 and 850 is good and people with such scores are considered prime borrowers.
FICO 08 Scoring Model
This new credit scoring model uses the same factors that were used by the FICO model, viz. payment history, credit utilization, length of the credit history, types of credit used, and recent applications for new credit while computing the credit score. Moreover, the scale is also the same, i.e., 300 – 850.
However, there are significant differences in approach when it comes to missed payments, credit usage, payment history, variety of credit, piggyback accounts, and delinquencies. In general, people who have accessed different types of installment loans, like mortgages and car loans, will be rewarded more by the FICO 08 scoring model in comparison to the FICO model. Again, people who use revolving credit extensively, those who are closer to their credit limit, and have a history of late payments will be penalized more by this new scoring model. However, in contrast with the old model, minor delinquencies will not result in a big penalty. In addition to the aforementioned changes, piggyback users, who try to increase their credit score by adding themselves as authorized users on credit accounts of people with good credit, will no longer benefit in the form of improved FICO scores. FICO 08 will also have two more scorecards as compared to the older FICO model that only had 10 scorecards.
This scoring model was developed by the three credit bureaus and is considered the primary competitor to FICO 08. According to this system, credit scores range between 500 and 990.
People with a VantageScore in the range of 900 and 990 (Grade A) are considered super-prime or least risky borrowers. They are likely to be offered the best interest rates by financial institutions. According to Experian, approximately 16% of the US consumers fall in this category of super-prime borrowers.
The range 800 – 899 (Grade B) is considered prime plus and includes borrowers who have exhibited good credit management skills, while 700 – 799 (Grade C) includes creditworthy or prime borrowers. The last two category of borrowers, viz. non-prime and high risk individuals have credit scores in the range of 600 – 699 (Grade D) and 500 – 599 (Grade F) respectively. It goes without saying, that people with grade F VantageScore are least likely to land up with loans and if only they do get credit, it is generally at an exorbitantly high interest rate. They constitute the bottom 19% of US consumers, according to data made available by Experian.
According to this rating scale, mortgage refinancing and loan modifications will not have a negative impact on the credit score of the borrower, in fact the latter may even result in a moderate increase in the borrower’s score. On the other hand, short sales and bankruptcies will have a negative impact like in case of the FICO model. Buy a copy of your FICO score or VantageScore, from the credit bureaus to get an objective evaluation of your creditworthiness.
Categories: Uncategorized Tags: considered prime, credit bureaus, credit score, credit scores, credit scoring, fico model, fico scores, payday loans, prime borrowers, reviews payday, score range, scoring model
Las Vegas, NV (PRWEB) December 14, 2013
Scott Hilton's Credit Secret, a program that aims at helping people improve their credit score and is specifically designed to give people a simple and legal trick to improve their credit score by up to 100 plus points has caught the attention of Shane Michaels, prompting an investigative review.
“Credit Secret by Scott Hilton is a program that uses a 100% legal loophole in the fair credit reporting act to help people improve their credit score. Hilton has helped over 12,000 people use this trick to improve their credit score practically overnight. Now Hilton doesn't claim to be credit professional or attorney, but he does know how to get people results,” reports Michaels. “It is not just a credit program, but a complete guide to a understanding everything you need to do to improve your credit. The techniques in the program have been carefully designed by Hilton to be very effective for helping people improve their credit score.”
Watch the video the credit bureaus don't want you to see here.
After the Scott Hilton Credit Secret review, Michaels shows that it offers an exact blueprint for people to follow to repair their credit. Hilton shows people in detail what the 100% legal loophole is and how to take advantage of it. In fact when Hilton implemented it himself he actually received an apology letter from American Express along with a $1,000 check for his trouble. That's how powerful Hilton's program is.
Hilton stated “I've helped over 12,000 people with my credit training and I even helped my girlfriend go from a credit score of 588 to over 700 in just a few weeks.”
“Scott has created a program around what a lot of people want and need…a higher credit score. This isn't some magic bullet and does require you to implement the 100% legal loophole that Scott Hilton teaches in the Credit Secret program. The difference is, with his proven techniques, you will see progress and get there as long as you follow the step-by-step training. Hilton is so confident that people will love his program that he's offering a no questions asked 100% money back guarantee.”
Those wishing to purchase Scott Hilton's Credit Secret, or for more information, click here.
To access a comprehensive Credit Secret review, visit this official site right here.
Categories: Uncategorized Tags: complete guide, credit bureaus, credit program, credit score, credit secret, helping people, hilton credit, legal loophole, people improve, review michaels, score hilton, scott hilton, secret review
Check your VantageScore too
VantageScore was launched by the three prime credit bureaus as a competitive alternative to FICO and it’s fast gaining acceptance among financial institutions. Ergo, now you need to check your VantageScore as well, along with your FICO score.Let’s face it, most Americans live on credit. Naturally, they often resort to taking loans at lower interest rates, to reduce their financial burden. This is exactly when credit scores, credit history, and related reports come into play. No loan application is approved before a detailed analysis of the applicant’s creditworthiness, which is quantified through credit scores and reports. So, what are good credit scores and when do you say you have a doomed credit report? Why are lenders so obsessed with this score? Let us find out answers to all these questions in the following lines. We introduce you to VantageScore and FICO credit scores, their scales, and determinant factors, as well as charts that will provide you with an indication of how your personal score will be perceived by lenders.
Credit Score Granting Bureaus
Technically speaking, the credit score is a statistical technique of determining the probability of an individual repaying his debt within a specific period of time, by evaluating and analyzing his previous credit history. In simple words, it is a numerical expression of your creditworthiness. Credit scores are granted by three bureaus in the US namely, Experian, TransUnion, and Equifax. These scores are formulated on the basis of a software program developed by Fair Isaac Corporation (FICO), hence also termed as FICO scores. VantageScore has been jointly developed by these bureaus and uses a different type of algorithm.
The evaluation is based upon the credit data of an individual, available with the credit bureaus. It is possible that the three bureaus have different credit reports regarding the same individual. Hence, he actually has three different credit scores. Nonetheless, the variation in the score range is not significant enough to influence the financial fate of a person.
FICO Credit Score Scale Chart
The FICO scale ranges between 300 to 850, as a measure of an individual’s creditworthiness.
|FICO Credit Score||Rating|
|680 to 719||Good|
|620 to 679||Average|
|580 – 619||Poor|
|500 – 579||Bad|
Credit Score Range Evaluation
As evident from the table above, excellent credit scores assure best prospects of getting a loan; that too at lower interests. Most money lenders will find it difficult to reject a loan applicant with a superior score. People with scores in the range of 720 to 850 will not have any difficulty getting loans at desired interest rates, provided other conditions are met.
Generally, any loan application with a credit score of 720 and above is treated in a similar fashion by the lenders. While a credit score beyond 800 is indeed splendid, it may not earn you extra points with the lenders. Your loan application will be reviewed in the same way as the one with a credit score of 720 or above.
Scores below 680 are considered risky and although there is no problem acquiring a loan, you may have to bear higher interest rates. People in the range of 580 to 619 may find it difficult to get loans and even if they do, the interest rates will be very high. People who have very poor scores should work upon credit repair before they can hope to get a loan sanctioned. In short, people with credit scores in the range, good to excellent, have no reason to worry, while those below, should look for ways to improve scores.
Determinants of a FICO Credit Score
Although, FICO has its own formula for evaluating the score, its variables are based upon certain factors. These factors and their corresponding weightages in deciding your score, are as follows:
- Payment history (35%)
- Outstanding current debts (30%)
- Length of credit history (15%)
- Types of credit accounts owned (10%)
- New credit applications (10%)
VantageScore Rating Scale
As an alternative model to FICO’s rating, VantageScore has been developed through collaboration, between TransUnion, Equifax, and Experian. It is based on a different algorithm, that has been constantly evolving to offer the most accurate picture of your creditworthiness. The current version 3.0 of the algorithm has been recalibrated to provide a rating scale ranging from 300 to 850, it being a familiar numerical scale.
Most importantly, this score considers individuals who have a credit usage history of less than six months, for whom traditional evaluators like FICO do not provide a score. Some of the other few features of the score include the exclusion of negatively-impacting debt collection accounts, from the calculations, provided they are paid off, as well as credit relief for victims of natural disasters. Four of the top 5 mortgage lenders, 6 of the top 10 credit card issuers, 4 of the top 10 auto loan lenders, and 7 out of the top 10 financial institutions now accept VantageScore to verify an individual applicant’s creditworthiness. Here is a ratings chart that illuminates the perception of lenders about your VantageScore.
|300-499||Deep Subprime/Very Bad|
The determinant factors in case of VantageScore are an individual’s bill payment history (the most important factor), type, and age of utilized credit, percentage of credit limit utilized, total debt, total available credit, and recent inquiries about credit, as well as related behavior.
Analyze your FICO as well as VantageScore before applying for loans as it will give you a fair idea about what you can expect from the lenders. Paying your bills on time and utilizing your credit lines intelligently, will see to it that your creditworthiness is positively reflected in the score.
In general, selling a home via a short sale will not hurt a homeowner's credit score, and certainly the process will not be as damaging as a foreclosure would be. For many families, the choice between continually struggling to make ends meet or trying to sell their homes seems easy. Due to universal drops in home prices, however, selling a home for the amount that is still owed on a mortgage is not necessarily an option for every struggling homeowner. For people in situations like these-where the home itself may no longer be worth the amount owed on a mortgage-a short sale is almost always going to be a better choice than going through foreclosure or continuing to pay for a property that one cannot afford.
Benefits of Doing a Short Sale
For many homeowners in this situation, one common concern is how to find another place to live in if there is a significant drop in their credit scores. With more and more rental companies looking into FICO scores before leasing to new tenants, this is a valid concern. Luckily, homeowners in Scottsdale who work with lawyers on their short sales can be confident that their credit scores will not be damaged to the point where they won't be able to find new places to live.
In fact, depending on the bank that a homeowner is working with, he or she could be eligible to buy another new house in a matter of just two or three years. That is a major benefit for the homeowner who can oftentimes qualify to buy a new home just two years after going through a short sell, because homeowners who go into a foreclosure typically have to wait a full four to five years before their credit scores are high enough to get a mortgage.
While filing for bankruptcy-which is another option for homeowners who cannot afford their mortgage payments-will damage a person's credit score, it isn't as bad as foreclosure either. Homeowners who file for bankruptcy can usually get another mortgage on a house an average of two years after their initial bankruptcy filing. For people whose banks are willing to work with them on short sales, going through the process is almost always the better choice when comparing a short sale to a foreclosure or a bankruptcy.
Why a Short Sale Might Not Work
You may have heard of a concept called hard money lending, and you may be wondering how it differs from conventional bank financing. Either type of financing is available for both commercial and residential real estate loans. The key differences are in three parameters: 1. Cost 2. Timing 3. Availability The cost of hard money is generally higher than conventional financing. Hard money lenders offer loans at a higher interest rate and with more points due at closing. A hard money lender is generally taking a bigger risk and feels justified in making more money off the loan. In addition, the money loaned is typically personal money rather than institutional money, which means that the profit margin must be higher to make it worth the lender's while. The amount of time required to get a hard money loan is vastly shorter than the time it takes to get a conventional loan. This can be a huge advantage when a loan is being sought to avoid foreclosure or to close on a hot real estate deal that is only available for a short time. Some hard money lenders can close in as little as 24 aE” 48 hours. Conversely, most conventional bank closings can take up to 45 days for residential properties and even longer for commercial loans. Another key advantage to hard money lending is that loans are available to people who may have less than perfect credit or have financial problems. Conventional loans are based on the creditworthiness of the borrower, as reflected in his credit bureau report and FICO credit score. Hard money loans are based solely on the equity standing in the property to be furnished. Hard money lenders are basing their loan terms off of the real estate collateral. For example, a Hard money lender is going to be more willing to make a $100,000 loan on a property worth $200,000 than he is to make a $180,000 loan on a property worth $200,000. Hard Money lenders base their loans off of the collateral in the property. They are more concerned about underwriting the loan based off the property being their asset than the borrower. As long as the property is full of equity, it is usually a safe loan for a lender. Hard Money lenders will usually base their loans off of the value of the property and not necessarily the purchase price.
If you are purchasing a property way under market value, you may want to consider a hard money loan in order to reduce or eliminate your down payment. Some hard money lenders will even allow you to roll all of your acquisition costs, closing costs, construction costs and even mortgage interest payments into the loan in order to purchase a property with a true, no money down loan. So, if you are buying a property that is selling far below its value or refinancing a property that is full of equity and need a loan in a hurry, it may be worth it to consider a hard money loan. You need to be aware that the cost of credit will be higher, both in points and in interest rate, but the cost may not be your primary concern. If you will be rehabbing the property and selling it, you will only have to pay the higher interest rate until the property is sold. Your profit margin should more than pay for the higher cost of the money you were able to borrow quickly without a high credit score. Jason Balin DC MD VA Hard Money Lender
If you are thinking that you would like to attend college but think you can’t because of a bad credit history, know that you are not alone. In our recessionary economy, millions of people are now finding it difficult to pay their monthly bills. There is a way to get student loans, bad credit notwithstanding. Even if you have a poor credit score, there are still lenders that major in student loans for bad credit borrowers. In fact, there are many companies that will aid you despite the condition of your credit history, allowing you to request a bad credit student loan.
Why You Probably Will Need A Student Loan
Nowadays, a college education is overwhelmingly expensive. Tuition costs at most universities run into tens of thousands of dollars each year, not including money for textbooks, individual course costs, or ordinary living expenses. To compensate, a number of institutions make huge amounts of money available for this type of funding. The problem is that some people cannot qualify.
Although there are numerous sources of scholastic funding available for students, more times than not the availability of funds is limited as a result of simple supply and demand. This requires some people apply for loans so that they can attend college or university.
Student Loans For People With Bad Credit
One of the ways that people can get funding for their college expenses is to take out a student loan. If your credit is weak, there is a way that you can get immediate approval by abiding by this rule: Lenders are looking for people that have first class credit ratings. If you can pin down someone to cosign the loan with you, your approval is almost always guaranteed.
This explains why private student loans for people with bad credit often seem more appropriate than applying for grants or scholarships for which you may not qualify. This virtually locks in your ability to go to a four year college.
However, you need to know about the advantages and disadvantages to taking out a bad credit student loan.
The lender knows at the outset that your credit precludes your getting a regular bank loan. Thus it’s possible that they won’t run a credit check on you. That could spare you a bit of discomfort and embarrassment when applying for college student loans for bad credit.
On the other hand, many lenders will insist that you put up some type of property as collateral against your loan. If you and your family have nothing to use as collateral, then you will need to seek out those lenders that do not require it.
Another thing that you need to be aware of is the cost of a bad credit student loan. With student loans, bad credit almost always means that your costs will be greater. While there may be very desirable interest rates offered to those students with a good credit score and clean credit history, you will not be eligible for them. In fact, since you are considered a poor credit risk, your interest rates may be quite high. The bigger the likelihood that you will default on your loan, the higher the rate of interest charged.
Also the amount will be compounded. This means that if you fail to repay your loan on time, the amount of interest you have due will be added to your principle, with interest and penalties charged on that.
So, while it is actually quite easy to obtain college student loans, bad credit or not, there is a price to be paid. Just make sure that if you do go ahead and borrow, don’t borrow more than what you unquestionably need, and make it a priority to pay it off on time.