Bad Credit Furniture Financing
Many people turn to bad credit furniture financing to furnish a new home or apartment. Once an individual's FICO 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 notes to customers, regardless of fiscal background. 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 negative furniture payment plans 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 Rather than settle for substandard, out of date or damaged appliances and electronics, short term installment notes can bridge the gap between insufficient income or damaged FICO scores and owning new furnishings. Many appliance stores offer payment options to any military or government employee. These plans 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 note 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 bankers 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 payment plans 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 payment plans for financing, it does have its negative side. If the buyers have terrible fiscal history, it may not matter to them whom the store chooses to fund their purchase through. However, the bankers chosen by rent-to-own establishments are considered last resort lenders by institutions. If the buyer has only a slightly damaged report, then it is a good idea for them to think twice about letting this type of lender appear on their future 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 monthly payments.
Like all installment loans, consumers do not anticipate the bumps in the road ahead. If the buyer loses her job or becomes injured and misses work, the monthly 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 plans 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 debt earlier than the agreed upon date. Furthermore, there are often hidden fees, like application charges, costs for finding funding, etc.
After weighing the pros and cons of poor credit furniture financing, what if the individual wants an alternative to an installment note 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 plain old plastic may still offer considerably less interest and fewer hidden fees than retailer debt. If a person's monetary history is too marred to qualify for any other kind of note, high interest payment plans are 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 fiscal worthiness. Creative but high-interest payment plans 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 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 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 bankers offered adjustable rate mortgages to individuals who may have not been 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 institutions can make exceptions for previously bankrupt borrowers who meet certain criteria. When approaching monetary institutions, it's best to own up to past monetary failures. Lenders appreciate an honest borrower who is not just trying to beat the system, but seeking to restore fiscal worthiness and banker 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 housing plans 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 FICO scores. Just two years after foreclosure, the FHA and hard-money bankers 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 banking institutions which provide home monthly payment plans 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 FICO scores, previous bankruptcies and foreclosures put would-be homeowners at risk of sky high interest rates. While foreclosures can be forgiven, high risk lenders make borrowers tow the line with interest rates nearly double those extended to buyers with fair to excellent fiscal worthiness. Mortgage payments can increase by as much as $200 to $300 per month over monthly payments for low-risk borrowers. If high risk consumers can endure higher down payments and interests, they can buy more time to rebuild and reestablish fiscal worthiness. Sometimes, a steady record of making payments on time will go a long way in removing a marred payment record. After obtaining home notes, borrowers can boost 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 report, but consistent payments over a prolonged period of time proves to lenders that borrowers are making positive efforts toward restoring fiscal worthiness.
Another option for cash-strapped consumers with poor payment histories is owner funding. Private sellers who are able to provide long term payment plans may be a bankrupt buyer's best alternative to obtaining a conventional mortgage. 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-backed home may be a lot easier. Due to higher interest rates and more stringent lender requirements, new and pre-owned homes for sale are plentiful. Contractors and real estate brokers are having difficulty moving new properties 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-funding 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 lending through private owners is that borrowers don't have to qualify for bank notes, interest rates are lower, terms are more flexible, and they can acquire more time to become more fiscally solvent and possibly qualify for lower interest prime loans at a later date.
To find high risk funding, borrowers should first contact consumer FICO 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 payment obligations. FHA and hard money lenders may require large cash down payments in order to qualify buyers for high interest notes, while sub-prime lenders are more lenient with cash-strapped buyers and may offer 100 percent funding. 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 funding through reputable lending institutions, borrowers can take advantage of owner-funding 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 high risk home funding without too much of a high-interest headache.