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Mike Hamel Profile and Articles
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1). Beyond a Bad Credit Car Loan: The Additional Costs of Driving a Car
score below 620, you will be in the bad credit category. You can still get a car loan; you’ll just be charged a higher interest rate.
To offset the higher interest on a bad credit car loan, you need to do all you can to keep your payments as low as possible. Having a decent down payment or trade-in will help. Experts recommend putting at least 20% down to keep from getting upside down on your car loan.
2). Good News About Bad Credit Car Loans
Almost half of all car purchases in America are financed. Couple this with that fact that 30 million Americans have credit problems and you see why there’s such an interest in bad credit car loans.
While carrying higher interest rates than prime loans, bad credit car loans are not hard to get. Even people who have filed for bankruptcy can find a decent deal on auto financing if they shop around.
3). Home Equity Loan Pitfalls
The home equity loan came of age in 1996 when changes in the tax law eliminated deductions for the interest on most consumer purchases. Interest paid on home equity loans, however, remained exempt, up to $100,000 for taxpayers filing jointly.
The two main types of home equity loans are fixed-rate loans and variable-rate lines of credit (called HELOCs).
4). Bad Credit Second Mortgage by the Numbers
Bad credit second mortgages make up a sizable part of the mortgage market. According to a recent survey by the Mortgage Bankers Association, the number of second mortgage originations increased by 13 percent in the second half of 2005 and closed-end second mortgages increased by 33 percent. The survey included 114 lenders that originated $189 billion in second mortgages, many of them to people with bad credit.
5). The Three Biggest Questions When Buying a Car
#1 New or Used
The average new car costs more than double what the average used car does. (The Kelley Blue Book pegs the average new car price in 2005 at $26,100 and the average used car price at $13,000). It’s not surprising, then, that used cars outsell new cars three-to-one.
New car loan rates are about the same as used car loan rates. The major difference between the two is the length of the loan.
6). Americans in Debt
Debt is a fact of life in America, making debt relief a national obsession. A search for “debt relief” on Google pulls up over 34 million pages; on Yahoo and MSN, the total is over 12 million pages.
The average American household has $9,300 of credit card debt, but the share of income going to lower credit card debt has fallen to 0.3 percent.
The increase in personal debt can’t all be blamed on overspending.
7). Bad Credit Car Loans For Hispanic Buyers
Bad credit car loans are easier to get than ever before, thanks to the growing subprime loan market. Almost half of all car loans today are bad credit loans, in that they are made to borrowers with FICO scores below 620.
Bad Credit Buyers Beware
Bad credit car loans come with slightly higher interest rates, which mean higher profits for car dealers and unwary buyers may wind up spending more than they have to.
8). Dealing with Auto Dealers – Seven Safeguards
Dealing with auto dealers can be the most daunting and frustrating part of buying a vehicle. Here are seven things you can do to tilt the playing field in your favor and help you get the most auto for your money.
1. Get your financing first:
Smart buyers get their auto financing before setting foot on the lot. This way, you know exactly how much you have to spend.
9). Subprime Mortgages and the Refinancing Boom
There are more than 19,000 mortgage companies in the U.S. and some of the largest and most reputable of them specialize in subprime mortgage refinancing.
Steven Frank, Senior Vice President of Marketing at FlexPoint Funding identifies a subprime borrower as “someone with a FICO score below 620. He or she will pay between 1.5% and 2% higher interest for a mortgage, but there is no shortage of money or willing lenders in the subprime mortgage market.
10). Mortgage Refinancing – Counting the Costs
Mortgage refinancing means paying off your existing mortgage with a new loan, using the same property as collateral. The amount you’ll save by refinancing will vary depending upon current interest rates, refinancing costs and tax consequences.
Mortgage refinancing makes sense if Interest rates have dropped more than two points since you got your original mortgage, or if you want to change from an adjustable-rate to a fixed-rate loan to avoid future interest hikes.
11). Second Mortgages Can Cap Housing Costs
In these times of rising interest rates, second mortgages or first mortgage refinancing might be just the thing to keep your housing costs from going through the roof. In a recent article in Parade magazine, How To Save on Your Mortgage, Lynn Brenner considered the question,
“Will Your Mortgage Rate Go Up?”
“If you have a fixed-rate mortgage, you have nothing to worry about.
12). Online Auto Financing Saves Time and Money
Getting online auto financing has become very popular in the past few years. According to a recent survey by Forrester Research, online shoppers are expected to spend $15.9 billion on autos and auto parts in 2006. The study also notes that, “22 percent of offline sales are influenced by the Web.”
Direct Financing
Getting auto financing directly from a bank, credit union or other lending institution online is known as “direct financing.
13). What You May Not Know about Bad Credit
What exactly is bad credit?
“Bad credit” is defined as a FICO score of 620 or lower. FICO (the initials stand for Fair, Isaac and Co.) scores range from 300 to 900. A score above 680 signifies good credit. Scores in the 620-680 range are medium and a score lower than 620 puts you in the poor credit range.
How common are bad credit problems?
Bad credit affects more than 30 million Americans.
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