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A period of recession is gearing up or moving down frequently. Along with it, monetization of the market is making the ventures optimistic. The statistics say that this year is crucial for the small businesses and they look up for positive result. We have to wait and see the dramatic changes. Business and finance are two such generic terms on which people searches the maximum contents. Therefore, I am also sharing a cup of hot finance knowledge through my blog.

In the financial year of 2013, stay with me to move ahead.

Thursday, 20 February 2014

5 Reasons Why Banks Reject Your Home Loan

Residents who aspire to own homes for their families have probably already researched on how to secure a home loan and what to do in order to secure one. However, some borrowers know little on how to get their loans approved. Before you embark on your application for a loan, consider reviewing some of the reasons below on why banks may reject your home loan:

You used your residential address on the defaulter list

One of the reasons why you may get rejection for applying for a home loan is if you use your residential address on the defaulter list. This simply means that the person who wants to apply for a loan lives in the same house of an individual who has not paid their credit card bills on time, or in a house where someone has skipped paying loans. Details like these passed onto national credit bureaus, which could then cause your loan to reject. In order to resolve this issue, tell your contact person at the bank that the family member or friend who might have applied for the loan is not dependent on you. Remember, it is applicable if the one who may have previously applied was your family member or friend. You can also stress to your contact person if your current address had a past tenant.

You constantly switch jobs

Have you changed jobs lately? If you are one of those employees, who are found switching from one job to another, then that can be one reason why they will not approve your loan. Banks as a sign of instability as you are unable to hold a regular job. The banks usually approve loans of borrowers who employed with a specific organization for a minimum amount of time to qualify for a home loan. Banks usually approve borrowers employed with a certain company from one to three years. Therefore, if you are young and you plan to apply for a loan anytime soon, you may want to stay with your current employer for a minimum of a year or switch jobs after the loan got approval. However, for older borrowers, you may want to stay longer or for a minimum of three years.
 You lie.
While filling up your loan application, ensure that all the details you provide are correct, and be sure to declare your full income from all sources, your assets, and liabilities, along with other loans you currently have. Banks will verify all your details in your application and do background-checks to see if these details are correct. Another important tip to get your loan approved is to double-check all your documents and see if you are submitting the complete list of requirements to support your application. Details that do not match missing documents and documents that look dubious can cause delays in the processing of your application—or lead to an outright rejection of the application itself.

You want to purchase an old building
Most banks do not lend money if the house you are planning to buy is an old building, especially those that are 20-30 years old. Check the policies of each bank to confirm, as the qualifications for old buildings vary for each bank. Good advice will be to increase the down payment, as the land’s value considered in the decision. You may also want to try to go for a decreased loan amount.

You have a bad credit record

One of the most obvious causes of home loan rejection is a bad credit history. If you have unpaid loans, overdue credit card bills, or a court case about any sort of financial concern that compromises your capacity to pay your financial obligations. This might reject your loan application. However, you may also be mistaken for someone with the same name who has a bad credit history, or you may have already had cleared your past record but the records were not updated. To ensure you will have no problems with future loans, get a written clearance from the banks stating that you cleared of any past loans.

Your former rejected loan application

Nowadays, banks now keep a record of all loan applications they have rejected in the past. Once you apply for a home loan, and if the lender rejected your loan previously, they will see it in the database. To resolve this, avoid applying for a loan at a bank where your loan was rejected. It is also wise not to apply at different banks at the same time. You need to wait until your loan rejects from a bank before applying to another. You might also want to ask the bank why they rejected your home loan application if the reasons are not clear to you.

Now that you have read some of the possible reasons why your home loan may be rejected, hopefully, you can do something to minimize the risks of loan rejection and successfully secure a home loan for yourself.

Good luck!

Author Bio : MichaelVincent from Money Hero contributed the article. It is the upcoming educational and financial comparison website of Hong Kong. Compare a broad range of financial products like loans and credit cards for free

Wednesday, 5 February 2014

Why It Is Not Good To Pay Off The Mortgages Faster? - PART I

Mortgages are a tough financial aspect that all homeowners have to face someday or the other. Some might argue that it does not fall under the financial interest now. In fact, they take it as the last thing to do. They ask to pay of the mortgages late and make ways for the retirement savings.

There are two reasons why people argue on the fact whether or not to pay off the mortgages faster.
  1. Fixed-Rate mortgages are quite cheap now.
  2. Inflation and interest rates might rise in the coming future.

Here, in this article we are going to share some popular reason as to why you should not payoff the mortgages early. Check out the cool tips and stay away from the overpayment of your mortgages.

Pic Courtesy: HomeForHer

Lower interest rates can beat down your investments

This is the common argument that financial experts face while clients ask about while paying down their mortgages. Today low-interest-rates have affected the market environment, and hence it allows people to lock 3.25% mortgage. Thus, you can invest all the extra money into the index fund and join the profitable share in the stock market.

Maintaining a mortgage is an enclosure against inflation

There are instances when we find that our clients have paid down the mortgages quite early. They look down as this process as a way to save large for the future, but what you got to save now was larger when you paid down the mortgage, however now it is nothing more than peanuts. Price all around us goes up and hence having that one bill will remain the same. The payment becomes cheaper with time.

Get some awesome tax savings

As soon as you buy a home, you get loaded with sweet packages of tax breaks to keep more money away from the government and put more money in the bank. You can deduct the interest on your mortgage payments, real estate taxes, points paid on the mortgage, mortgage insurance or if you have  a small business.

You screw up yourself while saving for the emergency funds

Before you send the extra dollar to your mortgage company, but strengthen your cash reserves. You might be saving large on interest than you earn through the bank account. What will happen if you lose your job? The bank is not going to give you a loan, as you are unemployed. 

Check out for more cool tips in the last part and see what you can do with your mortgage this season.

Author's Bio: Moumita Dasgupta, a financial blogger and the owner of bizandfiz, shares her knowledge and expertise of various financial topics. A clear view on market, business, Forex, funds, personal finances etc. are the subjects she perfectly underlines through her articles.  Find Moumita on Google+

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