SubPrime Mortgage Mess...?

[Jo Ann]

Just wondering if anybody here is currently caught up in this subprime mortgage mess? I ask this not out of noseyness but because I have decided to look for a loan myself. To be honest I feel intimidated by the whole loan concept. There are so many loan companies out there I’m not sure where to begin. I understand this question maybe of a to personal nature. If you have any comments or thoughts I’d appreciate it. I’m not expecting anybody to walk me down to the lenders office just trying to get a feel in what direction I should search or maybe what lenders to avoid and not waste my time.

Thanks for Listening,

[GreggC]

Beware of loan companies that offer large loans for small payments. There is at least one company that I have seen advertise on TV that does this. What people don't realize is that all they are paying is the interest and none of the principal. You will have to forgive me if this is something other than what you wanted, but loan companies that do this to consumers really jerk my chain, and it ain't nice to jerk the big boys chain.

I hope this helps

[Jo Ann]

Thank-you GreggC,

I am interested any comments, thoughts or opinions on this matter.

[smweaver]

Jo Ann, my advice to you is to simply look for a decent and FIXED interest rate. I think too many people get caught up in the idea (and it's a compelling one) that getting a house now on a (initially) low, adjustable interest rate will somehow help them out in the long run since they'll (in theory at least) be able to save more money now, and they'll likely make more money, or the economy will improve, or interest rates will stay the same or (even better) decrease after the end of that first three, five, or seven year period after they take out a mortgage. I'm building a house now, and even though I'm going to be paying more each month for what I'm getting, there's at least some peace of mind knowing that whatever happens, I'm not going to get a nasty surprise later compliments of some greedy bank or a fluctuating market. Good luck with your search.

Steve

[flhiker]

Hi Jo Ann, Steve gave some great advise, the only thing I can add is to check your credit score and if you can improve it in any way before applying for a loan also make sure you DON'T have a pre-payment penalty just incase you want to refinace later. Search many companies before you decided.

[Jo Ann]

Thanks Guys for responding to me,

I know I sound ignorant but I just turned 40 this month and never had to deal with this Credit History Score concept. I was always a if you don’t have cash to pay for it you don’t buy it person. But because of some lifes turn of events I suddenly find myself at the mercy of my credit score. I applied for my first secured credit card last year. I’ve learned some really stupid things regarding your credit score such as, if your credit score is checked by to many people it can affect it in a negative way. It also seems too that its better to have a bad credit score then no credit history at all …hmm When you tell people that you’ve never had a credit card or bought anything on credit you get a very strange look… or silence on the phone...

[Lagoon]

I'd be glad to loan you my credit cards if you pay off the already charges

Just kidding Jo

I hope you had a wonderful Birthday

[cb977]

The guys have already given you the same advice I would have except that I would check out what my bank is offering first.

I feel the need to say something about credit cards. It's important to have a line of credit...start by applying for a store card, purchase something...and pay the bill in full when you get it. Apply for a second card at a different store, purchase something and pay the bill in full when you get it. Then get one of the major credit cards like VISA, Mastercard or Discover. Choose one that has no annual fees.

This will establish the fact that you pay your bills in a timely fashion, which is what it's all about.

The key...and most important thing is to PAY YOUR CARDS IN FULL EVERY MONTH! Treat it as you would cash, since you've always dealt with cash before now. When you buy someting, use the card but put the cash that you would've spent on the side. When the bill comes, use that cash and you'll be fine.

Too many people pay way too much in interest on their cards. It's not a bargain if you find something at a great price, buy it on credit and then spend years paying interest charges. NEVER pay just the minimum.

Good luck

[shakkai]

Originally Posted by cb977

The key...and most important thing is to PAY YOUR CARDS IN FULL EVERY MONTH!

Amen to that, Sue!!

When I moved to the UK, I ran into the 'no credit history' trouble. I even had troubles opening a bank account, as they deem checks (cheques, here) a form of credit. (You get a cheque guarantee card along with your chequebook which 'guarantees' the person accepting the cheque they will be paid up to a certain limit.

I don't know if they do mortgages over there similar to the one we have - but the one we have is fantastic. Its called the "One Account" (offered here by Virgin through Royal Bank of Scotland) and it is basically a very large checking account, with a huge negative balance. Our salaries are paid directly into the mortgage account (reducing the amount of interest charged). We pay all of our bills out of the mortgage account, just as we would with a normal checking account. The bonus is that any money left over after paying bills, goes to pay back the mortgage. You can pay in as much as you want, whenever you want, and you can take out as much as you want (up to your pre-defined mortgage amount) whenever you need it.

This flexibility allowed us to pay off our mortgage in about 5 years, saving all of that interest accruing! Plus, we still have the ability to borrow up to our agreed mortgage amount whenever we like, without any other loans or approvals necessary.

[Jo Ann]

Thanks everybody I really appreciate you took the time to offer me your advice and personal knowledge….