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Getting A Home Loan With Bad Credit

Getting A Home Loan With Bad Credit

Everybody wants to be able to get a house one day, and in many cases, it can actually be cheaper than renting. So why should bad credit stop someone from getting the necessary home loan to be able to buy their house? The truth is that these days there are more than a few lenders who would be ready to give you, on certain conditions, the bad credit mortgage you want. Here are some details about it.

It is true that having bad credit will eliminate you from some of the best deals, but it does not eliminate you altogether. The first thing you need to do to ensure that you can get the best deal available to you is to look at your current credit report and check it over for incorrectly reported problems. These can easily happen and they are probably much more common than most people think. After you correct any inaccuracies, you can continue the process.

The next step would be to decide whether you believe you need to have a bad credit mortgage quickly, or if you want to take a little time to repair your credit rating. Of course, it is recommended that you repair your rating some and it will enable you to get a better deal.

Decide what kind of loan you want. You will need to know which one you want when you start making your application. There are basically two kinds, a fixed-rate mortgage, and an adjustable-rate mortgage. A fixed-rate mortgage remains the same in terms of interest and payments throughout the life of the loan. An adjustable-rate mortgage, on the other hand, changes every period (could be monthly or yearly) in terms of interest and payment amount.

Go to your bank’s mortgage officer, or look online and begin to see what you can borrow. Don’t get so excited, though, when a lender extends you an offer that you fail to compare with other offers. Truth is that there are many that will lend you money – but many will not be in terms you will want to accept. Look over all terms carefully, compare interest rates, and then all fees separately. Be careful about extra long terms – longer than 30 years. While it does lower your payments, it also definitely increases the amount you owe.

In order to get better deals, you should be able to put down at least 20% of the cost of the house. Also, you will want to use it in such a way that it should be the last time you will ever need to get a bad credit mortgage. Your credit can be repaired, but do not get a home loan bigger than what you may be able to safely handle. A financial counselor can advise you on what is the best way to arrange your finances and can recommend to you what is a safe amount of mortgage for you to handle. Remember, your home is now the collateral for the mortgage, so you will want to take care to keep your new credit levels intact.

Home Mortgage And Our Age

Home Mortgage And Our Age

Home mortgage refers to the document borrower signs that gives the lender a right to take possession of the property if the borrower fails to pay off the loan.

We, the people, and they, the people also, love to own things. Some important, some trivial. From small things with great sentimental values to large things that everyone envies. Owning a home for most is a dream come true and for most, it is a dream most will never truly realize.

Yes, most live in a home but as long as you make a payment on the home mortgage, in my opinion, you do not own it. It does not diminish the pleasure you or I drive from living in a home that is not a rental nor do we take less pride in the fact that we actually live in a property that most people can call ours.

After all, we pay property tax, insurance, and homeowner dues. We mow the lawn even when we rather watch football and repair the roof when needed even if we have to borrow some more money to pay for it. We furnish the home, buy indoor plants. We landscape the yard and we throw parties in the back yard and play tag with our rottweiler.

For all practical purposes except one, we own the home. So why am I making a big deal out of this thing called a home mortgage? Maybe I shouldn’t since over the last twenty-some years of homeownership, home mortgage, home equity line of credit, and the second mortgage has helped me out of so many financial troubles that I can hardly count.

As my wife and I get older we also realize that every time we traded our home up we moved to a bigger and more beautiful home which also meant a bigger mortgage. We realize that we cherish freedom more and more and home mortgage obligation is something that we love to have paid off. We like to truly own the home.

As you look at various lenders looking for new home mortgage loans or refinance your existing home, you may also consider that you, at some point, may want to own your home. Perhaps, choosing the lowest interest rate is not the best way to go but the one that with a little hardship helps you own your home a little earlier.

I think one of the greatest financial securities in life is not owning a home but having the home mortgage paid off. What do you think? Do you need assistance in buying your dream home? We can help!

How to Repair Your Credit and Buy a Home

How to Repair Your Credit and Buy a Home

There are three major consumer reporting agencies (CRAs), or credit bureaus, that mortgage companies use to assess a buyer’s credit rating: Experian, Equifax, and Trans Union. Credit scores typically range from 300 to 850. When you buy a home, a score of 650 or higher indicates a good credit history and will make it easy for you to secure a mortgage. If your score falls between 620 and 650, your borrowing capacity will be examined more closely. And if you rate below 620, you may have a credit crisis.

When you’re in the market to buy a home and discover that you have bad credit and your score is low, don’t despair. Although it may delay the purchase of your home, there are ways to repair your bad credit rating so that you can still qualify for a home mortgage with a decent interest rate.

To evaluate your credit rating you’ll need to obtain copies of your credit reports from the various agencies. Examine them carefully to see what transactions are lowering your score.

Special note about bankruptcies

Bankruptcy can lower your credit score by 200 points or more. Repairing bad credit following a bankruptcy is beyond the scope of this article.

Charge-Offs

Charge-offs appear on your credit report if a creditor has given up trying to collect from you and ends up writing off the amount you owe as a bad debt. Charge-offs are one of the main reasons why loan applicants are denied credit.

How to Repair It

If you have any charge-offs, contact those creditors immediately and make arrangements to pay off the old debt. After a few months of regular payments, or if you repay a charge-off debt in full, submit a written request to that creditor to change the status on your credit reports.

Late Payments

Late payments are handled slightly differently depending on whether they are isolated incidents or recurring problems.

How to Repair It

If you have a single late payment here or there listed on your credit report, the best thing to do is contact your creditors by phone to discuss the situation. Follow the conversation with a written request to have the isolated late payments removed from your reports. If you’re consistently late with payments, however, repairing the problem is a little more involved. You’ll need to begin by setting a pattern of paying on time over several months. Once this positive pattern is established, call your creditors (and follow-up in writing) and let them know that you’re back on track. With persistence and patience, you may be able to delete these score-lowering marks.

Reporting Mistakes

Sometimes, creditors just make mistakes when reporting to the bureaus. Other mistakes might include charge disputes that resulted in an initial late payment that was eventually reversed. Unfortunately, it’s the individual’s responsibility to spot – and repair – reporting mistakes that lead to bad credit.

How to Repair It

Once again, contact your creditor by phone and follow up with a written request that the mistake is corrected. Because the Fair Credit Reporting Act (FCRA) requires that credit agencies and their information providers investigate reports of inaccuracies, you’ll also want to contact the CRA directly to report the discrepancy.

As you work on repairing your credit rating, there are other things you can do to improve your score:

• Make sure that you pay all of your monthly bills on time

• Avoid opening new credit card accounts, including department store cards

• Work toward paying down your unsecured debt, but keep accounts open even if you pay them off

• Pay cash for the things you need instead of charging them

If, after all your work, you still score below the 620 marks, it doesn’t mean that you won’t qualify for a home loan. It may mean, however, that your mortgage will take longer to process and the terms and interest rate may not be as good as you were hoping for. Talk to your real estate agent about referrals to high-risk lenders.

Repairing bad credit can take many months to a year or more. But when you’re ready to buy a home, you’ll be glad you took the time to improve your score – and your mortgage payment will be lower because of your efforts.

See how our home buying assistance can help you acquire that dream home!