Traditional lenders are making it easier for people to get sub-prime loans. Even if you've filed for bankruptcy or had your home taken away, you can still get a loan to buy a home. Doing research and comparing terms and rates is the key to subprime mortgages.
The record of your credit
You don't have to go to sub-prime lenders just because you have bad credit. One is that you might still be able to get an A loan, which is only given to people with good credit. If you filed for bankruptcy four years ago or more and have been making payments on time since then, your FICO score is probably over 600, which is what you need for an A loan.
You can apply for a loan through FHA loan programmes two years after a bankruptcy or foreclosure. VA loans also look at credit problems in the past more kindly. In the end, don't think that you have to apply for sub-prime loans with higher interest rates just because you have bad credit.
Sub-prime loans
If you find out you have bad credit, you can still work with a traditional lender, who may offer you better interest rates. As financing companies add more kinds of loans, more and more of them offer services for B, C, and D loans.
Some subprime mortgages are based on your credit history, but most are based on how well you've paid your mortgage or rent in the past. You should send copies of your rent checks or receipts to show that you have paid your rent. Your credit report can show if you've been making your mortgage payments.
Subprime mortgages are just a way to get money for a short time. When your credit history has gotten better, you can refinance your mortgage to get a better rate.
Sub-prime Lenders
When you start looking for a subprime lender, you should look into all of them. Ask for quotes from both traditional lenders and those who work with people who have bad credit. Compare the rates and terms of each financing plan to find the best one.
You should try to find a loan with a low APR and no fees if you pay it off early. If you don't plan to keep your mortgage for at least seven years, paying points to get a lower rate is probably not worth it. You might also find that an ARM gives you more buying power and lower rates than a fixed-rate mortgage.
