Bad Credit Home Loan - Apply Online And Keep Your Credit Score As High As PossibleWritten by Carrie Reeder
If you have a poor or bad credit history with something in your past like a bankruptcy or a foreclosure, you know how difficult it can be when you try to get financing for a home mortgage purchase, refinance, home equity or second mortgage loan. Its important to be persistant in looking because there are home mortgage loans out there for people with bad credit.
There are many articles online that will tell you to be wary of subprime lenders, those lenders who specialize in doing hard to approve loans. There are many things to be careful of with subprime lenders, who can charge interest rates that are far too high and have unreasonable pre-payment penalties. However, if you shop around and talk to many different mortgage brokers, you should be able to find a lender that can get you approved and with an interest rate and terms that are fair.
The best way to make sure you are getting lowest interest rate and terms possible, if you are looking to get approved for a mortgage loan after a bankruptcy or foreclosure, is to apply with as many different lenders as you can. You will want to compare as many mortgage loan quotes as possible to make sure you are choosing best one.
When you have a low credit score and are applying with sub prime lenders, main thing you need to be careful of is to make sure that your credit report is not pulled until you have pretty much decided which lender you are going to want to work with.
Every time your credit is pulled by a mortgage lender, your credit score will drop just a tiny bit. That is why you need to be careful. Sometimes even as little as a 5 point drop in your credit score can be difference between getting approved or turned down for a mortgage loan. Most mortgage lenders, especially those that specialize in hard-to-approve home loans need a credit score of 585 – 600 or higher in order to do 100% financing with no money down on your home loan. The bottom line is, you will need that score to be as high as possible.
Bad Credit Home Loans - Pre-approval Is Still Possible With Adverse Credit HistoryWritten by Carrie Reeder
If you are among millions with less than perfect credit, there are many sources available to you in obtaining a mortgage. Lenders that specialize in mortgages for those with bad credit are competing for your business. The lender will analyze your credit report, credit score, debt-to-income ratio, and your employment history. You may also be asked to provide statements from your utility companies and other creditors to help form a complete picture of how you manage your finances. The lender will then inform you of how much you can afford to spend on a mortgage and terms of proposed home loan.
A bad credit home loan will naturally be made with a higher rate of interest than for those with good credit. Keep in mind that your home will still appreciate in value and after maintaining a good payment history for a period of time, you may be able to refinance your mortgage at a lower interest rate and lower your monthly payments. Along with making you monthly mortgage payments in a timely manner, you can also help improve your credit rating by lowering your current debts, avoid applying for more new credit, and keeping your credit card balances low.