Bad Credit Mortgage May Be
Easier Than You Think To Get
Is it possible to
get a mortgage with a bad credit mortgage?
mortgage market, a bad credit mortgage is possible.
In the past,
applying for a loan involves a thorough check up on your credit history
and income background. If your credit was bad or if your income was not
high enough or both, then your application for a mortgage was. This
limited who could apply for a mortgage and there for some individuals
felt they could not buy a home.
Now a days
guidelines were developed to include that untapped market of
discouraged home buyer. That is when Bad credit mortgages were
introduced to makes home loans possible for people to get a bad credit
mortgage to purchase or refinance a home. When applying for a bad
credit mortgage loan, you get pre-qualification just like any other
mortgage. Lenders who offer bad credit mortgages to a certain extent
are willing to give you a second chance at home ownership. With a bad
credit mortgage, your credit history will determine what type of
interest rate you get and you may have to explain the circumstances
that caused this bad credit.
There are several
lenders offering bad credit mortgages for purchases and
refinances. Sometimes a bad credit mortgages may
sound too good to be true. With bad credit mortgages, It’s
best if you keep an eye open and ask lots of questions
Credit Mortgages and Higher Interest Rates
Bad credit mortgages
can be characterized by a high interest rate. The lenders will charge
borrowers a higher interest rate as compensation for the risk taken on
their bad credit mortgage. Like it or not, borrowers who have bad
credit mortgage are a higher risk. This helps the lender make
the money they need incase they have to foreclose on the bad credit
Points for Bad Credit Mortgages
Discount points are
very common with bad credit mortgages. A discount point is a percent of
the total mortgage amount. Bad credit mortgage borrowers are charged
more discount points because they with to secure a riskier mortgage.
Other borrowers may not pay these points or unless they want to lower
their rate. With bad credit mortgages discount points may go as high as
ten (hard money mostly). It all comes down to if mortgage insurance is
willing to insure a mortgage for the borrower. Lenders want to make
sure that they will get their money back from the bad credit mortgages.
Down Payments with Bad Credit Mortgages
Your down payment
required on bad credit mortgages is much larger compared to other loan
types. In exchange for taking the risk, lenders make you put a larger
down payments from the total purchase price (or leave more equity in
the home). This in fact lowers the lending institutions risk
involved. A person may not be able to afford the down
payment. Yet, you can afford the down payment required but they will
allow various means for meeting that as well. Because of this
down payment a bad credit mortgage might even prove a good thing for
you. Since the down payment you made is higher , you will now pay lower
monthly payment on your bad credit mortgage.
check the value of
the home now!***