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How to pick the right loan



	Having trouble with qualifying ?

	A “hard money” loan is a term used by lenders too often. It usually means that the person applying for the loan does not qualify as a prime borrower. There can be several reasons for this, but they usually fall into two categories:
the borrower’s credit has a problem, or there is a problem with the property involved.

Have you ever been foreclosure ?

Foreclosure is the legal process by which your rights and interest in a piece of property are taken away in order to satisfy some debt owed or connected to that property. For instance, if an individual cannot afford to keep up his monthly mortgage payments he would be forced to default on his loan and 'foreclose' on his home. His lender would then own his home (possess title to it) and proceed to sell it in order to recoup the money the lender lost on the defaulted loan.

Have you ever had anything repossessed ?

'Repossession' is the process by which a creditor takes back the goods he's sold you because you've failed to make payments on those goods. An individual, for example, who purchased a refrigerator under a payment plan, and then consistently missed his payments, would be a candidate for repossession. Usually, the company with whom you have the payment agreement will contract someone to take or 'repossess' the property from your home/office establishment.

Appliances and automobiles are the most common objects of repossession, though it can happen with real estate (it's often referred to as 'foreclosure' in those instances). Since purchased goods depreciate quickly, and because repossession of sold goods constitutes a major loss for creditors, creditors are slow to move toward repossession. Repossession, therefore, usually indicates a substantial history of late or null payments. If you've experienced a repossession, lenders will probably consider you 'high-risk'.

Have you ever defaulted on any loan or credit line ?

Defaulting (failing to pay back) on a loan or credit line is considered a sign of poor credit history by most lenders. Only time and attention spent rebuilding your credit history can take away this blemish.

Are there any outstanding judgments against you ?

If you are currently being sued by a creditor or lender for monies related to a default or foreclosure, then you are considered to have an outstanding judgment against you. This doesn't mean you cannot get a loan, or necessarily have poor credit. If you are fighting the suit or contesting the judgment, inform your lender of your circumstances. Most likely he will review your situation and make a discriminating judgment based of the merits of your present situation.

Have you ever received a collection notice ?

If you have failed to pay a bill for a good or service (whether it's on a payment plan or otherwise) you may get a notice from a collection agency hired by the company you are in debt towards. Creditors often prefer to use collection services over repossessing your property, since repossession can rarely compensate the creditor for the full price of the sold goods or services.

According to the American Bankruptcy Institute, millions of Americans filed for bankruptcy last year alone. Bankruptcy filers come from every background and represent every income bracket. People file for bankruptcy for a variety of reasons, including divorce, medical bills, job loss, and credit card debt.

If you feel uneasy about filing for bankruptcy, consider this: there are many other people facing situations similar to yours. Despite these differences, bankruptcy filers have something in common. They realize that they have a problem that they can't resolve on their own. Bankruptcy offers a second chance to debtors who are in over their head

Here are some things you may not have considered… We tell kids that you need to have a credit card to establish your credit, but did you know that too many credit cards can disqualify you for a loan?

How many credit or lines do you use at this time, and how many are within 80% of their limit ?

Even if you have never had a late payment, lenders will see you as a credit risk if the majority of your credit cards are 'maxed out' (i.e., 80% of their limit is currently owed).

Do you have any current notice of default ? Have you had any notices of default in the past 4-5 years?

If you have to send a notice of default to your creditors because you can no longer make payments, or have done so in the past 4-5 years, you will be seen as a riskier borrower

Are you currently a party to any lawsuit ?

If you are a defendant in a lawsuit, lenders will probably consider you a credit risk – even if you normally have a perfect credit record. This is because, if you are found at fault, your income could be substantially affected. You could even be forced to declare bankruptcy if the judgment were harsh enough.