Bad Credit Furniture Financing
Many people turn to bad credit furniture financing to furnish a new home or apartment. Once an individual's credit score has plummeted, he has had a financial history of delinquencies, or he has had a recent bankruptcy or foreclosure, finding a credit card or a short term bank loan is next to impossible. Is this to imply that people with unfortunate financial histories should not have chairs to sit on or beds to sleep in? Hardly! Now there are furniture and appliance stores that specialize in offering short term loans to customers, regardless of credit. This allows the client to have furniture or electronics in the home, while still paying toward the purchase price of the appliances. There are specialized finance options for veterans or retired people as well.
Veterans have risked their lives for the freedom of commerce that allows the furniture and appliance stores to do business. With this in mind, there are bad credit furniture financing options that cater to the specific needs and capabilities of military personnel and veterans. Rather than settle for substandard, out of date or damaged appliances and electronics, short term installment loans can bridge the gap between insufficient income or damaged credit and owning new furnishings. Many appliance stores offer finance options to any military or government employee. These loans are available regardless of whether or not the individual is retired or active and regardless of what his or her rate or rank is. This is especially helpful for retired military individuals who may be injured or elderly. Disability can often make budgeting difficult. If an elderly military person needs furniture in order to be physically comfortable, then this type of loan allows them to enjoy the home and find comfort, without having to come up with a huge down payment or the full cost of the electronics, computer, appliance or furnishings. To ease the burden of repayment, many financers will extend zero down payment plans, as well as offers of no repayment.
Another advantage to purchasing home furnishings, appliances or electronics through stores that offer bad credit furniture financing is the expediency of the delivery. Many stores that require the patron to pay full price or a large percentage of it have fewer customers. Therefore, their floors are full of pieces that are for show only. This requires the buyer to wait weeks, if not months, for furniture to arrive from the manufacturer. Because those establishments that offer financing often make it possible for more customers to own furniture, these types of stores are full of items that the buyer can drive away with or have in his or her home within days. This makes moving into a new home or apartment much less nerve wracking. The homeowner can quickly enjoy his home without sitting on boxes, waiting for the "comfort" to arrive from the factory.
Despite some of the obvious advantages of bad credit furniture financing, it does have its negative side. If the buyers have terrible credit, it may not matter to them whom the store chooses to finance their purchase through. However, the creditors chosen by rent-to-own establishments are considered last resort lenders by financial institutions. If the buyer has only a slightly damaged financial report, then it is a good idea for them to think twice about letting this type of creditor appear on their future financial reports. Because these stores make a considerable amount of their profits from the interest, cash is seldom effective in negotiations. In a typical retail store, a buyer can often leverage their cash to obtain a lower sale price, free installation or delivery. In the case of the rent-to-own stores, cash is not as important as the potential interest from the payments.
Like all installment loans, bad credit furniture financing does not anticipate the bumps in the road ahead. If the buyer loses her job or becomes injured and misses work, the loan payments are not going to go away. Had she saved and purchased the items with cash, her purchases are safe despite the storms that may appear. In this way, loans will never be as sure as buying something with cash. There is risk when accruing debt, and that can never be avoided. In addition, the plans that offer no interest for the first few months often figure those months of interest into the remaining payments. Store installment loans have notoriously high interest rates, so these few months of interest may pack a bigger punch than the buyer is prepared for. Also, because so much of the store's profit comes from interest payments, there are often penalties charged for paying off bad credit furniture financing earlier than the agreed upon date. Furthermore, there are often hidden fees, like application charges, costs for finding a lender, etc.
After weighing the pros and cons of bad credit furniture financing, what if the individual wants an alternative to an installment loan from a retail store? Cash will always be a shopper's best friend. However, realistically there are not many people who can furnish an entire home or office with the cash in their back pocket. In these cases, home equity loans or credit cards may still offer considerably less interest and fewer hidden fees than retailer financed loans. If a person's financial history is too marred to qualify for any other kind of loan, bad credit furniture financing is still a viable option for obtaining the home or office of her dreams. "Yea, they spake against God; they said, Can God furnish a table in the wilderness?" (Psalm 78:19)
Bad Credit House FinancingLending institutions which specialize in bad credit house financing can offer high-risk borrowers a chance to buy a home while rebuilding credit-worthiness. Creative but high-interest financing may be the only option for borrowers who have filed bankruptcy or previously lost homes to foreclosure. The Great American Dream of home ownership can easily turn into a homeowner's worst nightmare when lending institutions foreclose due to an inability to meet higher adjustable rate mortgages or make ends meet due to high unemployment. A lagging economy, a nationwide sub-prime lending crisis, and escalating interest rates have forced some homeowners out on the streets. Sadly, property owners are simply walking away from homes easily acquired just several years ago when sub-prime lenders offered adjustable rate mortgages to individuals who may have not been financially stable enough to qualify.
Recent news reports indicate that Americans are facing foreclosure at an alarming rate, forcing the nation's families to seek alternative housing, some even experiencing homelessness. But foreclosures can be forgiven and lending institutions can make exceptions for previously bankrupt borrowers who meet certain criteria. When approaching lending institutions, it's best to own up to past financial failures. Lenders appreciate an honest borrower who is not just trying to beat the system, but seeking to restore credit-worthiness and lender confidence. Similarly, God extends forgiveness to those who confess sin. "If we confess our sins, He is faithful and just to forgive our sins, and to cleanse us from all unrighteousness. If we say that we have not sinned, we make Him a liar, and His Word is not in us" (I John 1:9-10).
Bad credit house financing puts home ownership within reach for borrowers whose bankruptcies are six months to seven years old, but the interest rates are much higher than those extended to individuals with fair to excellent credit scores. Just two years after foreclosure, the FHA and hard-money lenders may qualify borrowers with a certain percentage down. The FHA requires the smallest down payment, usually less than 5%; while hard money lenders may require as much as 1/4 to 1/3 down on a high interest rate loan with some stringent prepayment penalties. Hard money lenders take on high-risk borrowers, but make them pay dearly for the privilege of home ownership. Sub-prime lenders are financial institutions which provide bad credit house financing for high-risk borrowers who have filed bankruptcy or lost a home due to foreclosure after a significant waiting period and scores of at least 580.
Low credit scores and previous bankruptcies and foreclosures put would-be homeowners at risk of sky high interest rates. While foreclosures can be forgiven, bad credit house financing lenders make borrowers tow the line with interest rates nearly double those extended to buyers with fair to excellent credit. Mortgage payments can increase by as much as $200 to $300 per month over home loans for low-risk borrowers. If consumers with poor credit can endure higher down payments and interests, they can buy more time to rebuild and reestablish credit-worthiness. Sometimes, a steady record of making payments on time will go a long way in removing a marred payment record. After obtaining home loans, borrowers can boost credit scores over time by acquiring a major charge card and making timely payments, holding down steady employment, and refraining from filing bankruptcy again for a minimum of seven years. It will take ten years after filing to wipe bankruptcy off of a consumer financial report, but consistent payments over a prolonged period of time proves to lenders that borrowers are making positive efforts toward restoring creditworthiness.
Another option for cash-strapped consumers with poor payment histories is owner financing. Private sellers who are able to provide long term bad credit house financing may be a bankrupt buyer's best alternative to obtaining a conventional home loan. However, for-sale-by-owner properties may require a large cash down payment, as much as 10 percent, with large monthly installments. In a buyer's market, finding an owner-financed home may be a lot easier. Due to higher interest rates and more stringent loan requirements, new and pre-owned homes for sale are plentiful. Contractors and real estate brokers are having difficulty moving new propertiess off the market and older homes are being offered at prices below equity. Sellers are anxious to sell; and in a sluggish real estate market, owner-financing is an attractive alternative to losing money while houses sit vacant. Otherwise, homes can remain on the market for years with owners either making mortgage payments out of pocket or renting. The advantage to bad credit house financing through private owners is that borrowers don't have to qualify for bank loans, interest rates are lower, terms are more flexible, and they can acquire more time to become more financially solvent and possibly qualify for lower interest prime loans at a later date.
To find bad credit house financing, borrowers should first contact consumer credit reporting agencies and request a recent personal statement. Scores under 580 may place borrowers in jeopardy of having to raise cash or take out a second mortgage to meet home loan obligations. FHA and hard money lenders may require large cash down payments in order to qualify buyers for high interest loans, while sub-prime lenders are more lenient with cash-strapped buyers and may offer 100 percent financing. Borrowers who have lost homes through foreclosure or bankruptcy may be required to wait at least six months to seven or ten years before qualifying for new loans. Aside from creative financing through reputable lending institutions, borrowers can take advantage of owner-financing with more flexible terms and lower interest rates. But in a buyer's market with a huge inventory of new and pre-owned homes and anxious sellers, the wait may be well worth it if borrowers can land reasonable bad credit house financing without too much of a high-interest headache.