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5 Ways to Get Home Loans for People With Bad Credit

admin — Fri, 10 Oct 2008 16:56:07 +0000

Even though the credit market is currently in melt down mode it will come back as confidence is regained. In the past home loans for people with bad credit were pretty easy to come by, but no one is sure what the approval criteria will be in the coming months and years. There are still ways to improve your chances of getting a home loan with bad credit and here are 5.

1^st – Try to find a good deal on a house. If you can find a house that’s priced lower than the appraised value you might be able to get a mortgage easier on that property. The lender will view this as if you have additional down payment money since you will immediately have equity in the home when you purchase it. Don’t assume this will be the case and talk to your lender first if you find a deal like this to be sure it will help you qualify for a mortgage.

2^nd – This probably won’t work as well anymore, but you can try some creative financing options. Lenders have dozens of options when trying to get you a bad credit mortgage, see if they have one that might suit you. Talk with the real estate agent as well and see if the seller is willing to help with the down payment or is willing to carry a second short term mortgage.

3^rd – This is really a no brainer, but you should save more for a down payment. A larger down payment can be a huge help in getting home loans for people with bad credit. It will also help lower your interest rate and if you need to save for an additional 6-12 months you may even improve your credit score enough to get out of the bad credit/high risk category. If you have no down payment or even just 10% to put down it can make a lot of sense financially to keep saving until you can afford 20% at a minimum for the down payment.

4^th – Take some time and improve your credit score. This follows right along with the tip above, but there are ways other than time to improve your credit score. You should take the time to get a copy of your credit report from each of the three credit bureaus and go through them to make sure they are accurate. Many times people are hit with bad credit due to mistakes on their credit reports. Other ways to improve your credit score include making all your payments on time, closing unneeded credit card accounts and avoiding applying for any new loans in the 6 months leading up to your home purchase.

5^th – Take the time to shop around with different lenders offering home loans for people with bad credit. Some mortgage brokers will try to get you to believe that they are the only ones that can get a mortgage for you, but this is rarely if ever true. By simply talking to another mortgage broker you may find that not only can they help you, but they can actually lower your costs. Each mortgage broker has relationships with a variety of lenders and some are more flexible than others in their lending criteria. You should request quotes from a minimum of 3 lenders before making a decision. The good thing is that online mortgage lenders have made it easy to get quotes, even when looking for a bad credit home loan.

If you want to enjoy the benefits of being a home owner then don’t let your bad credit stop you. There are ways to improve your credit score to qualify for a home loan and there are even ways to get home loans for people with bad credit. Be persistent, shop around and keep working towards your goal of home ownership and you can find a way.

Mortgages for People With Bad Credit

admin — Mon, 22 Sep 2008 19:27:05 +0000

Getting mortgages for people with bad credit can be a bit of a challenge. Having bad credit can be a problem when applying for any type of loan and with something as large as a mortgage this is especially true. It’s normal to go through periods of frustration and disillusionment when trying to get a bad credit mortgage, but all is not gloom and doom.

There’s actually some good news for those with bad credit histories. You can still get a home loan and bad credit loans are not nearly as difficult to get as they once were. You have every chance of success these days when applying for a bad credit home loan, in fact there are many mortgage companies specializing in bad credit mortgages. Even the larger traditional mortgage companies are now involved with bad credit borrowers. They understand that bad credit in today’s world is not as risky as it once was.

The companies offering mortgages for people with bad credit are often referred to as sub prime lenders and they work specifically with those who have poor credit. They will still use the FICO credit score to determine your credit worthiness, but they won’t necessarily decline your mortgage application solely based on a bad credit score. Typically anything below 620 is considered a bad credit score, but the poor credit mortgage companies will still work with you as long as your score doesn’t fall below 500.

Thanks to these bad credit mortgage lenders many who would previously be denied for a mortgage now have cause to celebrate. They now have a place to turn to in spite of their past credit problems and can enjoy all the benefits of home ownership. Keep in mind though that not all bad credit mortgage companies are kindly, some are only looking out for their own bottom line and care needs to be taken when choosing mortgages for people with bad credit. The worst of these companies will charge much higher interest rates, have excessive fees and may even try to get you into a loan that is inappropriate for your situation.

I’m sure you’ve already seen advertisements for mortgages for people with bad credit. The mortgage companies have been quite aggressive in advertising their services, especially on the internet and the ads are quite commonplace. Along with this you’ll also find that the application process for an online bad credit mortgage is both straight forward and quick. These bad credit mortgage companies know that they are in a profitable area and they are making things as easy as possible for those that need bad credit loans.

Just do yourself a favor and take the time to do some research before you start working with a mortgage lender. Mortgages for people with bad credit are definitely available, but it’s important to keep yourself safe as well.

5 Tips About Home Loans for People With Bad Credit

admin — Mon, 08 Sep 2008 18:00:20 +0000

Even with the current mortgage crisis, home loans for people with bad credit are easier than ever to get. Here are 5 tips to improve your chances of getting a bad credit home loan.

Find A Good Deal

Finding a good deal on a property can be a challenge, but if you have bad credit then it could ultimately be the difference between getting a good bad credit home loan or not. The loan officer will view it as if you’re making a larger down payment if the property already has some equity when you buy it. The best way to see if these types of properties will help you to get a bad credit mortgage is to speak with your mortgage broker.

Investigate Creative Financing

There are a variety of creative ways to get home loans for people with bad credit. Adjustable rate mortgages (ARM’s) have been very popular lately and will continue in popularity so long as interest rates don’t begin to rise. Just be aware that if rates do start to rise you could see a significant jump in your monthly payments. Another option is to have the seller help with the financing by putting some money back into the deal as down payment money or by having them carry back a second mortgage on the home. This can get you the extra $10,000 or $20,000 you need to get that mortgage.

Have A Down Payment

OK, you can get a bad credit home loan with 100% financing, but if you can put down even 3-5% you could see a big drop in your interest rate, saving you tens of thousands of dollars over the life of the loan. Do whatever you can to save up for your down payment and make it as large as possible. It might even be wise to wait an additional 3-6 months before getting your home loan, especially if it means the difference between having a down payment or not. In case you don’t have a down payment now, keep in mind that you can always refinance later to get a lower rate.

Shop Around

A lot of mortgage brokers would have you believe that if they can’t get you a loan then no one can. Nothing could be further from the truth. Be persistent and you’ll soon find that even if the 1^st and 2^nd lenders can’t help you, it’s quite possible the next one can. This is one area where online mortgage brokers can be a huge help because they typically have relationships with multiple lenders and will shop around to find you the best deal. Plus, they are quite often used to finding home loans for people with bad credit. It really is nice to be able to compare several loan offers and choose the one that is best for you.

Boost Your Credit Score

One obvious way to improve your chances of getting a bad credit home loan is to increase your credit score. And there are some simple ways to boost your credit score quickly. First, check out the three major credit reporting bureaus to make sure there are no incorrect items on your credit profile. You would be surprised how often this happens. Next, make sure you are making all your payments on time to help your score. If you are looking to buy a house, don’t apply for any new loans or credit cards to keep the number of credit inquiries down. Too many inquires in a short time can hurt your credit score.

Really, if you want to buy a house then don’t let bad credit get in your way. You can get home loans for people with bad credit, it just might take a bit more time and creativity. Apply to several lenders and apply with online mortgage services. And especially look for mortgage services that specialize in home loans for people with bad credit. They will make it much easier to get you into your dream home.