Acquire Property at Low Cost on Taking Bad Credit Real Estate Loan

For acquiring an area of land or developed plot, huge funds are needed which are hard to find from own sources. In case of the aspirant labeled as bad credit then taking necessary finance becomes tough task. Bad credit real estate loan comes to the rescue of these fund seekers. The loan can be availed at lower interest rate despite bad credit. Thus the loan goes a long way in lowering the cost of acquiring property.

Bad credit real estate loan is mostly offered by banks or financial institutions. They closely look into borrower’s credentials like credit history; credit score to decide over loan approval. Credit cards, mortgages, bankruptcy filings and other information’s also count a lot in the loan offer. The loan seeker’s credit worthiness is represented well in his credit score which on FICO scale ranges from 300 to 850 and credit score below 580 is considered risky and bad credit for loan offer.

Your bad credit does not come in the way of taking bad credit real estate loan and acquiring property if you decide to opt for the secured version of the loan. The aspirant buyer has to secure the loan through any of his property such as home, placed with the lender as collateral. After the loan secured, one can ask for any amount of loan to buy real estate. Another way of securing the loan that the lender takes the deal papers of the concerned property in his possession. The deal papers are returned back only when the loan is fully paid off. The borrower, meanwhile, can use the property as he likes.

If secured, the loan is offered at lower interest rate which can be reduced further once the property buyer compares different lenders for lowest possible interest rate as each lender has own rate. Also, if borrower asks for a lower amount than equity in collateral, the loan is availed at reduced interest rate. You can comfortably return the loan in 5 to 30 years period.

Another way to avail the loan is to use good credit of your business partner who can join you in buying the real estate. This is very popular way of availing loan in business circles. This way your partner’s good credit becomes yours and you take the loan at relaxed conditions. In lieu of good credit you can offer a portion of business to your partner. Meanwhile you should make efforts to improve credit score. To do this, pay off bills in time. Credit rating can be improved on forming your own business venture that will give you a regular income and a good employment history.

Prefer online for applying the loan. This medium allows you access of numerous lenders and you can compare loan packages for easier terms-conditions including interest rates.

Bad credit real estate loan is of great help for acquiring real estate at lower interest rate and low cost. Make sure you pay off the loan installments in time to avoid any debt trap.

Free help by SBA for Small Business Loans

Why should anyone be interested in helping you for free?

The government benefits if it gives small business start up loans and that is why it helps.

o Statistics show that small businesses number more than the big businesses.

o Small businesses employ more than 50 percent of the work force.

o Small businesses contribute to more than 50 percent of the nation’s GDP-Gross Domestic Product.

o Small businesses are the principal source of new jobs.

Starting a small business or expanding your small business is not easy. Expert guidance and help is given to you for free by SBA. The US Small Business Administration was established in 1953 and has business offices in every state. SBA works with thousands of lending, educational and training institutions nationwide. It does not provide grants but offers counseling. Government small business loans are offered to many entrepreneurs. Look up the web sites of the state economic development agencies to know if it is available in your state.

SBA is only a guarantor of loans offered by banks and other private financial institutions. The lending institutions that agree to terms of the SBA provide loans to small businesses through SBA. In case of inability of repayment of loan within the stipulated time; the SBA pays the lender the agreed upon guarantee amount, and the borrower has to pay the SBA the entire amount.

Can the SBA help you?

Small business is one that is independently owned and operated and is not dominant in its field of operation. SBA has regulations to determine whether your business qualifies as a small business. You could look up the SBA website or federal government regulations to find out if your small business startup loan or small business loan for expansion qualifies. Your business has qualified then the next question that any lender would ask you, is: Do you have a business plan?

Most lenders would require a detailed description of the business you are going to start up or expand. Look up the SBA site for planning options and counseling. The many things that SBA helps you is

o Writing a business plan

o Getting the loan

o Marketing

o Licenses and Laws

o Patents and copyrights

o Selling to government and abroad

o Hiring employees

o Buying the right equipment.

Notable among it various programs are Small business loans for minorities, Small business loans for Women, Small business loans for veterans and young entrepreneurs. The various small business loan programs offered by SBA are.

Basic 7(a) Loan Guaranty

This is the primary business loan program. It is offered to those who do not qualify for loans through the normal lending channels. The terms offered by SBA are more flexible. Valid loans are those where the proceeds of the loan are used for sound business purposes. The maturity is 10 to 25 years depending upon working capital and fixed assets.

Loan Prequalification

Low income borrowers, disabled business owners, exporters, rural and specialized industries are the target for this program. Bad credit small business loans do not fall in this category. The applicant has a credit merit then it is easier to secure the loan.

Certified Development Company (CDC), a 504 Loan Program

This is a variant of the Basic 7(a) loan to obtain real estate or equipment for expansion or modernization.

Micro Loan, a 7(m) Loan Program

This is available in selected locations in most states. The SBA stand as guarantor to organizations that provided the loans, technical assistance and management for small scale financing. Not-for-profit child-care centers can also avail these loans for working capital or purchase of inventory or supplies.

Disaster Recovery

Home owners, Property owners in disaster areas qualify for this loan program. Term of the loan is 30 year and the rate of interest is below 8 percent for those who can obtain credit elsewhere and below 4 percent for those who cannot obtain credit elsewhere.

Stated Income Home Equity Loans: Cash Out Financing Made Easy

Simply put a stated income home equity loan means that the borrower is not going to be verifying any assets or your income in order to give you a loan. That’s not possible you might say, but it is. For the most part the only people who will end up getting a stated income home equity loan however, are the borrowers with an outstanding credit report. In the bigger picture, these second mortgages are an excellent choice for the person who is self-employed and needs to borrow money but again, good credit is almost mandatory.

At creditlinkx, the no income, no asset verification and stated income loan process is explained as a mortgage that is a, “specialty loan that does not verify a borrower’s income or assets with traditional documentation, such as those who are self-employed or salaried.” Furthermore, “These types of loan programs allow a credit worthy borrower to access financing through no traditional documentation. Some programs even allow a borrower to finance 100% of the property value for a refinance or a purchase.”

For the self-employed person who starts a business it often takes up to three years or more to get going or to even show a profit. Then, of course, there are the many expenses that are written off, all within the rights of the law, but it certainly doesn’t help when applying for a loan. Overall, that means that you need three years of tax returns and they must show a profit.

In other cases, individuals might have additional income sources other than work-related that do not show up on a pay stub, for example second jobs, income from a hobby or a home-based business in addition to a full-time job. For these borrowers, they probably won’t qualify for a traditional loan either so the stated income home equity loan is a plus.

If you read the Wall Street Journal you know that the folks who are behind making all the money don’t always play by the rules. For them home equity rates, adjustable rate mortgages, fixed interest rates, variable interest rates, second mortgages and home equity loans are all to be designed as needed. That is why some lending companies do offer stated income home equity loans while keeping the many untraditional ways of making money in mind. For example, some companies offer bank statement programs that let a borrower utilize personal and business bank statements to prove cash flow. Instead of looking at what is left at the end of each month these companies look at the deposits on an average of one to two years. With this information it is often much easier to get a stated home equity loan and secure 100% financing for a loan.