Owner Builder Loans - Everything You Need to Know About Credit Scores (business website templates)

August 27th, 2008 admin Posted in finance |

By Chris Esposito

With all of the recent changes in the mortgage industry, it can be tough to keep up with the different requirements for the different loan programs available. Owner builder construction loans are probably as complex as residential mortgages can get. But, there are some simple rules about your credit scores that can make understanding the owner builder guidelines a little easier.

The first rule of thumb for an owner builder construction loan is that you will want to have a credit score of at least 620. Obviously, the higher your credit score is, the better it will be for your loan. However, if you want to be an owner builder to build your own home, then you will need to have a middle FICO credit score of at least 620.

Technically, for most owner builder loan programs, there is no strict minimum credit score requirement. In most cases, your loan application will be run through an automated approval system, which will analyze your overall risk factor. However, even without a strict minimum, you most likely are not going to get the approval through the computer system without at least a 620 score.

Along those same lines, an owner builder may not get approved for their financing even with a credit score above 620. In addition to analyzing your credit score, the approval system will also examine your current credit health. In other words, if you don’t have any current, healthy accounts that are at least one to two years old, then having a credit score above 620 probably won’t be enough to get your approval.

Likewise, owner builder construction loans are going to provide better rates in terms for borrowers with higher credit scores. Specifically, having a credit score above 700 will help you get the best rates and terms available.

It is important to remember, though, that a strong credit score will not assure an owner builder of getting approved. In other words, an owner builder with a strong credit score is not going to get through underwriting if he has too low of a documented income or too much debt. Furthermore, a strong credit score won’t be enough to get the loan approved if the project has a poor appraisal or an unrealistic budget. Therefore, a good credit score is just one piece of the puzzle for a strong owner builder file.

In fact, here are some of the specific advantages of having a higher credit score when applying for an owner builder construction loan:

1. An owner builder who has a high credit score can often get approved with less than the normal amount of savings in reserves.

2. If you have a credit score above 700, you will have a much smaller down payment requirement for an owner builder construction loan.

3. Also, an owner builder with high credit scores will get better interest rates as compared to someone with just average credit scores.

So, even though a having a credit score won’t get an owner builder approved if there are other glaring issues with the file, it will certainly provide the three advantages listed above.

Therefore, if you are considering being an owner builder, make sure you have a middle FICO score that is at least above 620. If your score is just barely over the 620 mark, then expect to have stricter down payment and interest rate requirements for your owner builder construction loan. So, if you have a limited amount of savings in the bank, you may want to work to get your credit scores above 700 before applying for an owner builder loan.

Owner Builder 101 and Chris Esposito provide loans for people who want to build their own home without paying the costs of a GC. To learn more about owner builder construction loans and how to save tens of thousands of dollars, visit Owner Builder 101’s website or call (877) 876-3688.

A Consumer Guide To Savings Accounts
By Nicholas Hunt

Savings accounts offer slightly different benefits and are used for slightly different purposes than checking accounts. The basic premise of a savings account is that it allows people a way to set aside excess funds and earn interest or obtain benefits from the bank that holds the funds. Many people do not understand why banks pay interest on accounts. Essentially banks are money distributors. They acquire funds at wholesale prices from people who deposit into checking and savings accounts. To get people to deposit funds, banks offer incentives such as interest. Banks then use the funds to provide loans or make investments that provide greater returns than what the money cost them to obtain.

Understanding the basic business model that businesses operate with, it is easier for consumers and businesses to see how savings accounts work. The more funds a consumer or business has to deposit into their checking or savings account, the more bargaining power they have with banks. This is why most banks offered tiered interest programs that pay higher rates for people than retain more funds in their accounts. Other banks charge service and other fees for customers who do not maintain minimum balance levels or reach other basis account requirements.

Savings accounts general start at a basic level. Most banks have simple savings accounts that provide a very small interest payment for consumers while offering a low minimum balance requirement. Interest rates usually rise as balances rise, but at a point, it is better for consumers for more opportune ways to set aside money. It is important for consumers and businesses to consider their savings needs and their desired benefits and then find the right bank and account to match those needs.

Saving money has become more challenging in today’s spend-happy and credit reliant consumer world. It is hard to justify saving money at less than one per cent interest while making credit payments with significantly higher interest rates. As credit card and loan balances are at all-time highs, it has become harder for people to save. However, it is still a good idea for everyone to set aside a little money at least for a ‘rainy day fund’. Most financial experts recommend people maintain a 3-6 months savings relief fund in the event of a job loss or other financial event that could be devastating otherwise. Therefore, most people should have some type of savings account.

Nicholas writes for Your Banking Guide, where you can compare bank accounts including high interest instant access savings accounts.

The need to opt for refinance
By Noam99 Judah99

The need to opt for refinance

The concept of refinancing mortgage is gaining currency all over the world because it is providing innumerable benefits to a person who is reeling under the pressure of ever-increasing debt. If a person is paying dearly for taking a home loan, he can opt for a mortgage refinance loan for slashing down the interest rate. Opting for a new mortgage loan in lieu of the current mortgage loan is termed as mortgage refinance. Mortgage refinance can assist a person to enjoy some unique advantages that can help him to get rid off the heavy burden of debt. This is the reason why more and more people are becoming interested to this concept.

The basic objective of choosing a mortgage refinance loan is to reap its unique benefits. If a person is paying high rate of interest, he can opt for a mortgage refinance loan for reducing the interest rate. There are numerous mortgage refinance companies that are available in the market and they are providing diverse kind of offers. Therefore finding out the perfect one would be a tough task for a person who is completely unaware of the very nature and aspects of this market. In this situation, he can take the assistance of a mortgage broker who is thoroughly acquainted with the ins and outs of this market. A mortgage broker can teach a person about the very nature of the market or he can assist him by giving him some valuable advice.

A mortgage refinance loan can assist a person to change his current lender. He can enjoy low interest rate and flexible repayment options. If a person had paid the installments of the previous loan timely, his credit score will improve and this will in turn help him to get a loan from a new lender who will not impose any severe restriction on him. One can enjoy longer repayment period and low interest rate simultaneously. No one wants to bear the burden of debt and the mortgage-refinancing loan can help a person get relief from this burden. Therefore, it helps a person to reduce the burden of debt without putting too much pressure on his pocket.

A person who has a good credit score can easily avail the advantage of mortgage refinance loan but those who dont have good credit score can also avail this loan; however they have to pay slightly higher interest rate. In fact, mortgage refinance loan gives a chance to a person to improve his credit score so that he can avail a homeloan without paying high interest rate in future. However, before relying on a particular mortgage refinance company, a person needs to accumulate some information about the market reputation of that refinance company.

One can search in the Internet for gathering information about a particular mortgage refinancing companies. Though there are numerous refinance companies which are available in the Internet, RefinanceMe Pty Ltd is considered as the best company, which is proving mortgage refinance loan at a very low interest rate. One can enjoy competitive rate, outstanding customer service and fast approval if he applies for a mortgage refinance loan from this particular company.

Noam Judah is author of this article on Finance.

Find more information about Mortgage here.

Develop A Website For Your Business To Make You Rich