Bad Credit:
A bad credit or a poor credit describes a period of time in the recent payment history of a customer when the later was unable to meet the financial liability of a credit agreement and thus has the possibility to be disapproved for a new home loan application. The reason of bad debt home loan can be failure of payment, or failure of making the payment in time.

How to Obtain Bad Credit Home Loan?
Bad credit home loan can be availed by individuals but of course not as smoothly as those with a good credit history.

Some vital factors to be borne in mind before availing a bad credit home loan are:
Value of the Home to be bought:
The value of the home to be bought comes into consideration. One can avail an amount equal to the value of the house. This is precisely done to ensure that the amount lent to the individual can be fully recovered by the financial institution in case of failure of the borrower to repay the same. In these cases the lender sends out a valuator to check the authentic value of the home.
Depositing an Amount:
Depositing a part of the loan as a share is always advantageous and advisable to the borrower. If the borrower deposits a higher amount of money (it is always advisable to do so even for a little amount of loan), then the rate of interest usually falls.
Higher Rate of Interest:
The rate of interest in case of bad debt home loans is much higher than the usual ones. Rate of interest remains high if the deposit amount is small or no amount is deposited.
High Closing Costs:
Usually in case of bad credit loans, the closing amount is much higher owing to the high rate of interest added to the principal. Generally a closing cost adds up to two to five percent to the total amount of loan. For a bad debt home loan, the borrower should not expect the closing cost to have a rise less than five percent.
Pre Payment Penalties:
Financial institutions who have specialization in financing bad credit home loan demand a high pre payment penalty. This penalty is taken in case the borrower wants to repay the loan amount before the stipulated time.

Are there any Valuable Suggestions for the Borrower in Bad Credit Home Loan?

• It is vital that you get an updated knowledge of your FICO score (a comprehensive credit report that renders the financial lenders with an insight on the credit history of the borrower. FICO stands for Fair Isaac Corporation).
• A good FICO score usually denote 850 to 650 points, but if you have a bad debt history, then your FICO score is bound to be lower than 620. In these cases, have a ready report for the reasons and factors responsible for your bad debt as you would need to explain on various cases.
• Do an in-depth research on the financial institutions offering good rates of interest in lending out the amount. It is advisable not to grab the first offer that you get.
• Honesty and transparency is the key to win the trust of the financial institutions who will lend you the loan so that your financial decision and conviction to repay the loan are reflected clearly.

Zero Down Home Loan – What Is It

Prior to the recession and credit crunch in 2007, opting for zero down payment home loans was a popular option. However, nowadays, no lender offers home loan without a minimum down payment. The down payment however, is kept as low as  3-5% of the house value. The eligibility criteria to get qualified for zero down payment home loan is made stringent.

Features and Types of Zero Down Home Loan Programs

In order to take advantage of zero down home loan, the borrower needs to have a very good credit score and credit history. In the US, an individual with a minimum credit score of 620 can apply for a 0 down home loan. Some lending institutions may ask for higher credit score. Before applying for a home loan, an individual in the US can know his credit score through any one of the credit score bureaus – Experian, Equifax and TransUnion. One can also get an annual free credit report from the site (www.annualcreditreport.com). In India, consumers can get know about their credit score and credit history from the CIBIL – Credit Information Bureau (India) Limited. The TransUnion score from CIBIL can be availed on payment of INR 450. The higher is the credit score (ranges from 300 to 900), the more would be the chance of getting loan.

As the down payment means difference between the total appraised value of the property and the loan taken by the borrower, the lenders offer lower down payment option only if they are sure of the repayment capabilities of the borrower. So under very specific conditions, the lending institutions offer zero down payment home loans to the buyers.

In the US, the following are the zero down mortgages, backed by the government:

• Rural housing loan program: This RHS low down payment program was mainly created by the US government to help the farmers, but it has become popular amongst the whole rural community. Low income to moderate income families can take advantage of this program and get nearly 100% of the appraised value of their property. In order to get this loan, one needs to live in a rural area (a place which has less than 20,000 population). One also needs to ensure the lender that though he or she is unable to put down a lump sum amount towards the down payment, he or she has the capability to repay the loan. The application process and paper work involved to get the loan approval is long and tiring.
• Veterans Affairs loans: The US Department qualifies you for VA loan if you or your spouse is a veteran, a member of the active duty or the reserves. In case of default, the federal agency takes the guarantee of repayment, so the lenders allow the home buyers to borrow up to 100 percent of the appraised value of the property. However, only serving the country does not guarantee loan approval. The eligibility criteria are based upon various service requirements. Apart from that, one also needs to ensure that he has enough income to make the monthly mortgage payment. Credit history also needs to be good.

Banks Which Provide Zero Down Home Loans

There is no bank in India that offers zero down payment option on home loan. However, the following banks offer low down payment option, if all other factors are satisfactory.

• State Bank of India
• Dena Bank
• ICICI Bank
• HDFC Bank
• United Bank of India
• UCO Bank
• Punjab National Bank
• Karnataka Bank
• Corporation Bank
• Federal Bank

However, prior to taking the loan, you also need to consider factors like – total loan amount, duration of the loan (normally it is 5 years to 20 years and sometimes going up to 30 years), interest rate, necessary documents (residential proof, identity proof, age proof, and income proof), guarantor (not mandatory for all banks), co-owner, and other related fees.

Process for Applying For Zero Down Home Loans

The procedure for application starts with finding whether the borrower satisfies the eligibility criteria to avail zero down payment loans. If the criteria are satisfactory, the lender decides upon the down payment percentage. However, in the current economic crisis, there is hardly any lending institution that offers zero down payment on home loan, there are certain banks who offer very low down payment, if the individual has excellent credit history and a sound income to repay the home loan.

Latest News on Zero Down Home Loans
Some latest news on zero down home loans is as follows–

• In the US, the federal government has stated that as the economy is rising at a moderate pace, the low mortgage rates for home loans still exist. Though there are possibilities of risks from the Euro zone, the government has decided to stick to the short term interest rate that is nearly zero for home loan until the year 2014. For a 30 year fixed rate mortgage, the interest rate in 3.75%, for a 15 year fixed rate mortgage, the interest rate is 3%. Individuals with good credit score can avail home loan with rate as low as 0.7% to 1% origination point. For FHA mortgage, the current interest rate for a 30 year fixed loan is 3.375% and for 15 year it is 2.875%.
• In India, the Reserve Bank of India has decided to cut interest rates for home loans by more than 0.5%. In its annual policy, the RBI has decreased its repo rate by 50 bps. By this new rate, the overnight funds will be lent to the banks by the RBI. It has also announced some customer-friendly measures, like abolition of prepayment charges for house loans and a zero balance savings account for everyone. Approving this new policy, the BSE Sensex has also soared and the value of rupee against dollar in the forex market has become 51.49 from 51.68. However, all the banks may not bring down the interest rates immediately. However, with the new interest rate, the monthly installment amount will also decrease. State Bank of India is looking for a comprehensive reduction in their loan rates. As per the chairman of SBI, Pratip Chaudhuri, the base rate is not yet decided and will be fixed by the Asset liability committee.

Mobile homes are also known as house trailers or static caravans. It is the furniture and the size of a mobile home that distinguishes it from the historic travel trailer.

Manufacturers of Mobile Homes
The concept of a mobile home is generally seen in countries like the US, the UK and Israel. The most popular global manufacturers of these types of homes are:

• Fleetwood
• Champion
• Palm Harbor
• Cavco
• Clayton
• Schult
• Skyline
• Marlette
• Fuqua Building Systems
• Silvercrest Corporation
• Self Build Timber Frame Limited
• Wessex Park Homes
• Global Campers Limited
• Retreat Homes Manufacturing Limited

Providers of Mobile Home Loans
Majority of banks do not provide loans for mobile homes if land for placing the manufactured home is also not included in the loan. This makes financing of mobile homes very difficult. Apart from banks, companies also specialize in providing loans for financing mobile homes.

Providers of Mobile Home Loans in the US
The United States Department of Agriculture gives loansto the low income group and to people living inrural areas and small towns of the US. The US government directs that no mobile home loan will be provided if the site and the home are not sold in a package. It also states that the site for mobile homes is to be brand new. Therefore, a new occupant cannot borrow a loan to buy the home if it has been vacated by the present occupant, since this home cannot be classified as new.

The ABSA Bank announced that the banks wants to regain its mortgage share and this has been appreciated by estate agents and mortgage originators. According to the sources, there has been a time that out of 100 applications for home loans, 50 got rejected.
South Africa witnesses a big market of home loans that amounts to R900bn, out of which, Absa Bank has R221bn share, as said by the Managing Executive of ABSA Home Loans, Sifisco Shongwe. Also he said that the bank has lost its share because of the low risk threshold. In order to recover from this, the bank has made the plan to conduct 30 percent more business in 2012.

The Home Loans market was ruled by Standard Chartered Bank in the previous year and there will be tough competition when the ABSA Bank will come in the race.
As said by the officials of the Absa Bank, there strategy to increase the market share is to improve their banking service. But how? Well they will use the Easycheck system in which the applicans who wish to have a loan from the ABSA bank can check their eligibility for home loan and that too in just 60 seconds.There will be focus on the existing clients of the ABSA Bank as the bank knows their risk profile.

According to the sources, about 6 lakhs of the customers of home loans shall now have to pay the less interest rate on the home loans taken by them. They just need to give the charges of the conversion fee of 1 percent on their left principle amount.

This step by SBI has been taken as the bank witnessed many of its customers going to other banks for home loans. Around Rs 100-150 crore business every month has been lost since May 2012 when the bank took the decision of waving off the pre-payment penalty on home loans.

With this new scheme, customers will be able to save 0.5 – 3 percent on their interest rates. Also other private banks like ICICI and HDFC too offer this conversion scheme to their customers. In order to lead the race among the banks, HDFC has reduced their conversion fee from 1 percent to 0.5 percent.

The Chairman and Managing Director M V Nair claimed that the Net Interest Margin is 3.3 percent and the bank is pondering over to decrease the rates on home loans as well as SME loans in order to give benefit to the customers.

The Bank will keep the Base Rate stable for now as there has been no positive signal from the Reserve Bank of India.

The ease in interest rate depends on inflation, oil prices, depreciation of the rupee and government borrowing.

There will be next annual policy review of RBI on 17th April 2012. The Union Bank of India wants its Gross Non Performing Assets below 3 percent from 3.3 percent by the end of March .

The Union Bank of India will work on Gold Loan segment also as it is very much in demand in Northern India. The Whole sale price index inflation is around 7 percent where as the food inflation is also increasing. The Retail price inflation is 8.8 in February which was 7.7 in January.

The RBA, made the cash rate at 4.25 percent and didn’t change the same but the banks increased their standard variable home loan rates as the funding cost increased.

So, banks are acting as an independent bodies irrespective of the decision of RBA and changed their variable rates of home loans. This step by various banks has left the customers in a bewildered state.

According to the sources, the there was an online survey and 764 people participated in that. According to the results, 46 percent favored fixed home loan where as 14 percent of the people showed their interest towards the fixed home loans. 36 percent of the people, do not want to go for Fixed rate home loans while 4 percent didn’t say their opinion.

Also it has been found that 11.4 percent of the home loans were granted in the month of January and all were Fixed rate home loans for 2 years or more. The data has been shared by the Australian Bureau od Statistics.

This foundation is launching a SPV (Special Purpose Vehicle) in order to cater the home loans for up to 35000 dwellers in Malaysia who are still renting and are not able to borrow sufficient funds from the bank because of the process of making the legal documents which in turn cause delay.

According to the sources, it has been found that the first RM300 million tranche of the RM1.5 billion plan will help the buyers around 7000 in number , who are not able to get the commercial loans.

The offer letters will be dispatched by mid April and by mid May, DBKL (Kuala Lumpur City Hall) and the EPF (Employees Provident Fund) will agree to the deal and the money will be given in the beginning of July.

FTF executive director Datuk Mohd Idris Mohd Isa, said that 25 percent of the loan will be in security while the low cost houses will be handed to the borrowers only when the loan will be fully serviced.

Also 20 percent i.e. RM60 million will be in a redemption reserve account. Another 5 percent i.e. RM15 million will be in Liquidity reserve account in order to ensure the EPF receives repayment of the loan in the event of late collections.

• You can save income tax by taking a home loan
• The range of home loans offered are more than that of other financial institutions in the country
• The processing fee is very low
• The documentation procedure followed by LIC is very simple
• The prepayment fee is also very low. In some types of home loans, no fee is charged
• The repayment options are flexible

Types of LIC Home Loans
Listed below are the different home loans provided by LIC:

• Home Purchase Loan – This loan amount is provided for homes, which ready for possession, generally for purchase of apartments in high rises.
• Home Improvement Loan – If an individual wishes to renovate or repair the home he is living in, this type of home loan is borrowed from LIC.
• Home Extension Loan – Loans are sometimes required for adding another storey to the existing building or adding a different unit to the building.
• Home Conversion Loan – If you wish to restructure the house you are living in, for example, from a bungalow to an apartment design, the home conversion loan is useful.
• Land Purchase Loan – This type of loan is taken for buying a piece of land on which a house will be built in the future.
• Home Construction Loan – If an individual already has a piece of land, he may borrow this loan to start construction of the home.
• LIC NRI Home Loans – This loan program has been specially designed for NRIs who want to buy homes or land, repair or reconstruct houses in India.

There are two forms of the SBI home loan calculator:

• The maturity value calculator – while using this, a customer will have to put in his SBI home loan amount, the duration of the loan and the rate of interest on that loan. The facility uses these figures to calculate the maturity value of the loan.
• EMI calculator – this is the easier of the two forms to use. A customer puts in his loan amount, rate of interest on that amount and the duration of the loan in months. There is a ‘calculate’ button on the device, pressing which the customer gets the figure of the EMI he will have to pay.

In order to be able to use the SBI home loan calculator effectively, a customer must be aware of his loan amount, the rate of interest that is applicable on the amount in the present moment and the duration for which he will want to calculate his EMI. The most unique feature of this facility of the SBI is that unlike other financial institutions in the country, no processing fee is charged from the customer. Since rates of home loans change frequently, the home loan calculator is useful for a customer to keep abreast of his altering EMI account and make plans for further investments accordingly.