A bad credit mortgage lets people with bad credit buy a home or refinance their current mortgage. It also gives them the best chance to improve their credit rating over time. When you apply for a loan or other type of financial product, like a mortgage, the lender will usually look at your credit report.
In a nutshell, your credit score is a record of how on time you've paid your bills in the past. It's used whenever money can be lent because it's the best way for a lender to figure out how risky a borrower is.
Tip: There is a lot of competition in the online lending business. There are a lot of lenders who help people with bad credit get mortgages.
The borrower's credit score is the most important factor in deciding whether or not to give a bad credit mortgage (s). Credit scores can be anywhere from 400 to 800, with scores below 620 being bad and scores above 720 being very good. On the other hand, there are many lenders with mortgage programmes that will finance up to 100% of the loan amount even if your credit score is as low as 580. Of course, your interest rate will be higher if your credit score is low, and most of the time you will only be able to get an ARM (Adjustable Rate Mortgage) with a fixed rate for 2 or 3 years that goes up after that.
Tip: Most states have lending laws that say a lender can only charge borrowers with bad credit interest rates that are a certain percentage higher than the retail or normal market interest rate. Most of the time, this rate is 5 to 8 percent higher, but even that is often a lot.
One myth about credit reports is that your credit score goes down every time your report is pulled. This is only true if you apply for credit products like credit cards, and only if you apply for a lot of them quickly. This doesn't work for mortgage lenders, though, unless you applied for a mortgage from a very large number (like 15 or 20) of lenders within 30 or 45 days. Only then would it be slightly affected, but most of the time, when a lender looks at your credit report, it won't hurt you.
Tip: The links below can help you find the best lender for your needs.
