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Three Loans For Today's Mortgage Broker

If you are a mortgage broker in today’s economy, you know how hard it is to get loans closed. The reason being is that a majority of the loan companies mainly dealt with sub-prime loans. Most of the sub-prime loan companies have gone out of business.

So is it still hopeless for mortgage brokers or are there still certain loans that can still make money in this economy? In this article, I want to take a look at three different loan types that today’s mortgage broker can utilize that do not involve sub-prime. A personal loan is another option. A personal loan is money that you receive from a bank and you can use that money to consolidate your mortgages and pay off your debts according to your financial condition.

FHA Loans

One non-sub-prime loan a mortgage broker can do is FHA. FHA loans usually have nothing to do with your credit score. Anyone can usually obtain this loan if they meet certain qualifications. Here are the qualifications for an individual to get this loan. You have to be a first time home buyer. You can not have bought a house with in the last five years. This is good for most young couples who are just getting started. You have to have paid your rent early or on time for at least 2 years and you can not be buying too many houses according to your income bracket. Most mortgage brokers that do these types of loans make a pretty hefty commission. The easiest way to find individuals for this type of loan is to target apartment complexes.

Reverse Mortgage

Reverse mortgages are also a great thing for loan officers in today’s economy. A reverse mortgage is when the mortgage company actually pays the person who owns the house monthly payments. These types of loans are usually good for the elderly crowd. The qualifications for this loan are simple. They basically have to own their home free and clear or have a lot of equity inside their home. Now with this particular loan, your credit score is a factor. Anyone with low credit scores will not be able to qualify for this loan. The best way to advertise for this type of loan is in the newspaper and print magazine.

Refinance

The last thing that loan officers can focus on refinances. These are some of the easiest loans to close. There are two types of refinances. There are a rate and term refinance and there are cash-out refinances. The main qualifications for this type of loan are a credit score and also equity in a property if it is a cash-out re-fi. The best way to get this type of loan is to go through old files with high rates and give them a call. Most of the business that you need is already in your file cabinet. You can also advertise in your local paper or print magazine to get new clients in.

There you have it. Three loans that mortgage brokers can still do in today’s economy. Go ahead and give it a try and I wish you all the success in your career.

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How Paydex Scores Affect How You Obtain Business Credit

If you are like many business owners, you have never even heard of Paydex, much less fully understand how this number is the key to how to obtain business credit based solely on your Employer Identification Number (EIN) and not on your social security number.

Paydex is a rating system developed by Dun and Bradstreet (D B;), the nation’s leading business and financial reporting service. D B; is the authority when it comes to business credit. They provide reports to other credit agencies, banks and financial institutions, as well as other businesses on the payment record of other companies. D B; compiles data from their business members who report on the payment habits of their customers, vendors, distributors, and suppliers.

Unlike your personal FICO score, a Paydex score does not take into consideration the amount of debt your business carries, or if you have too much credit, or not enough. Paydex is mostly concerned with one thing: do you pay your bills consistently and on time?

Business credit is rated DAILY, not monthly and that the reasons why most business owners are always concerned about, how to better manage my money which is a big threat for their business if they don’t do so? Every single time you pay a bill early, your score can be improved. Every time you pay a bill even one day late, your score can be hurt. A Paydex score of 80 means you pay every bill exactly on time, on the due date. Whether that due date is in 30 days, or 10 days, or 90 days, you pay exactly when it’s due. A Paydex score of 75 means you pay an average of 5 days late; 70 means your company on average 10 days late. If you always pay 5 to 10 days before the due date, your company may have a Paydex score of 85 or higher. There are other factors, such as amount of payment, but timeliness is by far the biggest influence in the score.

The Paydex Score is regarded by many in the business community as the single most important indicator of good business management and financial stability. Companies with no presence in the D B; database, or with low Paydex scores often have difficulty making supply and credit arrangements with other businesses. Having a low Paydex score will often require companies to have to pre-pay all or part of their orders in advance. This can often cause cashflow issues, putting the business at significant financial risk. On the other hand, companies with high Paydex scores (80 and above) can enjoy reduced interest rates, favorable payment terms, and access to money when they need it to improve their business.

If a business finds it may have trouble paying an account that is reporting to D B;, the company needs to be proactive in protecting their business credit reputation. Once a company is “red-flagged” in the D B; system, there is almost no remedy to get it removed. So as soon as a business realizes they may be in financial trouble, they need to contact a D B; representative and have them review their file and their Paydex score. D B; may delay negative reporting for companies who contact them directly and can verify that they have made payment arrangements with their creditors. D B; is also willing to help a company obtain letters of reference from satisfied customers and suppliers who are willing to back your creditworthiness.

Much like the ins and outs of personal credit is not taught frequently in high school or college, how to obtain business credit is not taught frequently in many business schools or business books, either. As a business owner, you need to learn this information for yourself, often by trial and error. The problem is that an error in establishing business credit can have devastating consequences you are unaware of until it’s too late.

There’s a new ebook on the subject, Money in the Bank: A Step-by-Step Guide to Establishing Business Credit, available from author Katryna Johnson, J.D., of Success Point Consulting. This introductory guide shows a business owner the proper steps to take, in sequence, to obtain business credit that will allow the company to access business loans. Some of the steps covered are the five required prerequisites that must be done before applying for credit, which creditors are most likely to grant business credit to a company with no history, how to build a D B; company profile, how to know if companies are reporting your payments to D B;, and more.