Your Questions About Mortgage Loans For Bad Credit

Laura asks…

How can I get approved for a mortgage loan if I have terribly bad credit?

admin answers:

There are so many factors here. First off what is your debt to income ratio? Also do you have any judgements against you?
Mortgage brokers do not like those things. There are some mortgage brokers that deal with subprime borrowers. But you will pay in high rates and costs. Typically you will have less house for a lot more money and may find yourself trapped in the long run.
But in any case i can gaurantee you will need money down. Anywhere from 15% to 40% depending on broker and credit.
I am unsure what is making your credit so bad but if i had to guess it is late payments, collections, charge offs, or what? I would strongly urge you to rethink your home buying right now and to get down to the nitty gritty which is your credit. If it is as bad as you say, you are going to need to really work on that. If you are not paying your bills and your credit report shows that, then the mortgage broker will know.
So my advice is put the house off for a couple of years and get working on improving your credit. For example any bills you have pay them on time. Lower what you owe on charge cards. Get the car you are financing paid down and on time. Keep your credit accounts open and don’t change them to a new card. Keep those balances low.
Also pull your credit report and review it carefully. Anything in collections see how long before it comes off. Watch them like a hawk to. If you keep negatives from going on and keep a good payment history your score will begin to improve.
I do not know the specifics about your credit reports so I can’t advise what to tell you to do. Check out the link I provided for some help.

James asks…

I have really bad credit. Is a mortgage loan impossible?

I have really bad credit. I made some mistakes as a teenager that are coming back to haunt me now that I’m 23 and married. My husband and I want to be home owners but we both have poor credit. I recently got a loan to pay off bad debt. I know it will take awhile for my credit score to increase but we really want to own our own home and are very good about paying our current bills on time. My husband is on social security because he is in a wheelchair but I have a monthly income of about $2200 and my work history is strong. Is it impossible for us to get a loan for a mortgage? Can you suggest any bad credit lenders that are legit? Thanks.

admin answers:

An FHA loan might be your answer, as they have more forgiving credit score requirements:

http://www.thetruthaboutmortgage.com/fha-loans/

You can also look for a local housing counseling agency in your area and make an appointment to see what your options are. Many so-called bad credit lenders can be predatory, so take caution.

David asks…

i need to get a mortgage loan. my credit is bad my scores r between 500-550?

is there any mortgage company in michigan that can help? if i know the place i want to get should i go threw the bank that has the house i want? or should i talk to the bank about renting the house for a year and then get a mortgage

admin answers:

I don’t know about michigan, but forget the bank and go talk to a mortgage broker, the will tell you what you need to do, how much to save for a downpayment, and how to improve your credit, and they don’t charge anything untill you buy your house

Mark asks…

Can a bank hold the release of TCT for a fully paid mortgage loan because of credit card bad debts?

admin answers:

I am not a lawyer. But I do not believe they can unless the debt is secured by the home. What they can do is get a lein against the home awarded.

Sharon asks…

bad credit loan programs? never heard of it; and I’m not in my twenties…I’m talking mortgage not a loan for?

Not a loan from my next paycheck to get me further in debt
I just need a legit bank with understanding and sympathy…is that possible?

admin answers:

Credit-report-free.totalh.com – try this service to boost you credit score before getting loan. After credit repair you can get the loan with minimal interest rate.

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Your Questions About Mortgage Loans For Bad Credit

Ken asks…

If a person is unable to get a Mortgage loan due to bad credit and, existing debts…….?

Will the interest rate still be high when the existing debts are paid off and, finally is eligibly for a Mortgage loan?

admin answers:

I gather the scenario is – person does not qualify now, so doesn’t buy house…person spends some time repairing credit..person repairs credit and is now eligible for mortgage…

At first, when the person is eligible, he/she will probably need a 20% deposit and encounter high interest rates. However, if the person continues to wait and rebuilds credit further, the required interest rate will begin to fall. It is possible that as the credit continues to be repaired, the required deposit may also fall, but that will also be dependent upon outside factors down the road (the economy, lending practices, etc.).

If when you first can qualify the rates seem high, wait and keep on rebuilding credit – there is no profit in taking a high rate mortgage just to buy a house – you could end up paying much more in additional interest than you earn in appreciation.

Michael asks…

Bad credit mortgage loan?

My husband and I are trying to get a home loan (we only need 20,000) for a home we are looking to purchase in TX. This would be our primary home. My husband’s score is 573 and we need to get this done as soon as possible. We have a small dp to put down (1,000 or so), any advice?

admin answers:

Don’t lose hope if you’re looking to buy a home. There are so many different ways to fund a home now, just about anyone with any kind of credit can get into a home, regardless of credit situation.

Of course, some will cost you more money in the long run, but a home it’s still one of the best investments that you can make, so, in many cases, it’s worth it, especially for the first year of ownership.

You should shop around, and ask different lenders what kind of programs they have, and if they can help. Try to find a lender that specializes in bad credit mortgages. You can find some bad credit mortgage lenders listed on this page on and off:

http://www.axalda.info/bad-credit-mortgage.html

Robert asks…

How can i get a mortgage loan with bad credit?

My credit is bad only from past hospital bills.I have paid off most of them but there is still about a thousand-1300.00 left.I have been renting for about 11 years now and never missed a payment.I have been at my job now for almost 12 years.I have tried a few places and they either tell me i have not enough credit or to many bad things on my credit.I am a single father of two and i do not make alot of money but my bills are always up to date.I am sick of throwing money away every month i could buy a house right now if i had all the money i payed landlords.Can somebody point me in the right direction.Thanks in advance for any help.

admin answers:

Depends on such things as income, down payment, location. But with what I know about your situation, visit the HUD website and start your research there. Good resource for financing and first-time home buyers

Carol asks…

Can I get a Mortgage with bad credit?

Me and My husbands credit scores are around 540ish, We have really bad credit. The only thing we havent had is a foreclosure or bankruptcy. The only good things on our credit is a small credit card and a car loan. We found the house of our dreams for 110000, the house appraised for 123000, so we would already have some equity. would we be able to get a loan with such bad credit and no money down?
Also, I have been in touch with the real estate agent about this house and we are meeting with her tomorro to sign the papers to make an offer. We know the people that are selling the house so they have already accepted the offer. I know just because our offer was accepted it doesnt mean financing is guarunteed but the agent from remax said she would do whatever to try to get us financed. I just dont want to get my hopes up for nothing.

admin answers:

Yes you can but it will cost you alot in Interest and fees . Also it depends on what caused the bad credit plus how bad it is .

Sandy asks…

Would a mortgage company refinance one of it’s mortgage customers that has bad credit?

Current APR 6.375
Would like to refinance around 5% APR

With lates and a few charge offs from 5 years ago, would a mortgage company do a refi for one of it’s existing mortgage loan customers that has a weak credit score?

admin answers:

Not likely. You would think it makes sense because you are more likely to meet a lower payment. However, the way mortgages are financed makes this a terrible deal for the bank. They cannot sell your new loan when the borrower has poor credit.

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Your Questions About Mortgage Rates Today

Sandy asks…

Where is the best source to find the current (today’s) mortgage interest rates percent for my state?

for the Maryland/Washington DC metro area.

admin answers:

Couple things – rates don’t really vary by state, but they do vary by a lot of things you don’t mention.

The thing to remember is that mortgage rates are based on risk – meaning the risk the lender takes on to lend you money. Getting a rate online will give you a very rough idea, but not necessarily what is right for you. To give you an accurate rate, someone needs to know about the property, how much will be financed, your credit, your assets and your income. Those things produce your risk which dictates the mortgage rate you get.

If you want a clear, accurate idea of what rate you can get, you should talk with a lender or use a qualification calculator that can give you loan options and rates.

Hope that helps!!!

David asks…

what are the mortgage intrest rates at today?

looking to refinance when they drop below 5%

admin answers:

Go to bankrate.com to get today’s prices.
Not likely to drop any further – trust me on this one.
Obamas plan is putting the hurt on banks.
Now banks know that anyone in the future can refinance and cost the bank money.
Banks may also have to write down your future loan even if they don’t want to.
So interest rates will go up soon.
It will also make it harder to refinance- please refi now.
Definitively before summer – when the summer buying season starts.
/

Donald asks…

Should we lock a mortgage rate today?

We close in 27 days – we can lock a rate of 5.375 today which is down 3/8ths from last week. Should we lock in today or wait a week??

admin answers:

No; it’s probably a good idea to lock. The market is favorable for you today. Follow this advice. New rates are issued at about 11am est. Wait until Wed. After 11am est and THEN LOCK. That rate is great..don’t get greedy.

Paul asks…

What are the average rates for mortgages today?

Is their a good website to look at these? Trying to figure out when a good time might be to lock in our rate. If they are going to drop in a few weeks I just might wait.

admin answers:

Here are a couple good websites:

http://www.hsh.com/

http://www.bankrate.com/

Lisa asks…

With bad credit, can I refinance my mortgage to the lower rate or will my bad credit prevent me from refi?

I have heard conflicting reports on this.

Now paying rate: 6.25%
Mortgage Rates today: 4.5%

Can I get the lower rate with bad credit?
So I guess the gentleman on Good Morning America does not have his facts straight. He said even with bad credit your mortgage company will refinance because the lower rate will help you stay current on your house note.

admin answers:

Actually it might be possible under the new “Home Affordable Refinance Program”, this requires most Fannie Mae and Freddie Mac lenders to work with you, if you have certain circumstances. Here is a website to check it out:

http://www.makinghomeaffordable.gov

GOOD LUCK!

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Your Questions About Mortgage Loans For Bad Credit

Michael asks…

bad credit Mortgage loan. do they exist?

Hello, I was wondering was it possible to get a mortgage loan with bad credit? I own a home already and have never been late with payments and am currently 2 months ahead. The house i want to buy is only $60,000. My husband and I make enough to pay both mortgages easily. We almost have the first home paid off and have gotten our debt lower (which mostly was accumulated through hospital bills) will so in about 6 months. This house is bigger and has enough room for our kids. Our other home is going to be rented out if everything goes well. Hopefully this question gets a good answer.
Also i have had my job for 7 going on 8 years at the same place. Lived in current home since 6 years.

admin answers:

Maybe, if your parents will loan you that. No one not willing to give you that as a gift will lend it to you though.

Mary asks…

Help with Mortgage Loans for people with Bad Credit.?

Is there any loan companies out there that are made for people with bad credit? Trying to purchase a home and can’t find a company that is willing to work with us. The loan isn’t a lot and we have enough of a down payment. Any help would be appreciated. And please no comments about taking care of our debt we have now. We have taken care of it and we do make enough money.

admin answers:

Try this

http://www.2find4u.com/index.php?a=personalloans

Some of those companies may help you.
Hope this helps.

Mandy asks…

How do I write a letter to a mortgage loan company explaining bad credit and late payments?

I am trying to apply for a mortgage loan to get a house. I just got out of the military and was deployed for 3 of the 4 years and sometimes I didn’t pay bills. How do I explain that. I have already started to pay bills off and fix my credit.

admin answers:

I don’t know if it will help to give them reasons you didn’t always pay. If you think it will help explain that you couldn’t get your mail out due to being in a war. If you didn’t have a support system at home like parents that could handle your accounts while you were deployed explain why.
You may have to wait to buy a home until you have good credit and are out of debt.

Helen asks…

I want to know everything on taking out a mortgage with little or bad credit?

I want to start flipping houses. I need to know everything about taking out a mortgage loan with LITTLE to BAD credit and what do you know about getting a loan on a For closer. I make 2500 a month and have the money monthly and the man power and a GREAT sales man to back me up now I just need the LOANS. PLEASE HELP!

admin answers:

Try http://poorcreditvisa.com

I tried the program for poorcredit with OX publishing.. It’s on the first page of this particular site. I signed up with an opening line of credit and it showed on my credit report as good standing.. Credit lines are from 5k to 10k with bad credit, they approved me!

Good Luck.

Lizzie asks…

Bad Credit Mortgage/FHA Loan?

Hello,

I’m trying to get some answers on a very simple question….. Is it possible to get a Mortgage/FHA Loan with a bad/poor Credit Score? I’ve been reading all types of forums and blogs on this and I’m not really getting anywhere. The thing is most of my past credit issues are going on 2 years of age or more. Should I pay them off or leave them be? I’ve read that if some things on your report are over 2 years old you shouldn’t pay them off because it will update it and hurt me even more. Is this true? I have no clue. The home I’m looking at right now is only $40,000 and I make nearly $24,000 yearly gross and I have plenty for a down payment. Should I just get all my information together and apply for an FHA Loan and cross my fingers?? Pretty much what I’m asking is, are there companies/lenders that don’t really punish you for bad credit as long as you can prove that you can afford the loan??

admin answers:

Most lenders will require you to pay off past collections and Judgments in order to qualify for the loan. Why shouldn’t you be denied credit if you have credit out there that you have not paid off?

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Mortgage Companies – Different Breeds Of Mortgage Lenders

If applying for a new home loan, there are numerous mortgage lending options. New homebuyers may not know where to start. Different mortgage lenders fit different circumstances. In fact, choosing the wrong lender may result in paying more interest. With this said, it is important for homebuyers to educate themselves on the different types of mortgage lenders, and select the lender that is perfect for them.

Traditional Mortgage Lenders: Banks, Credit Unions, etc.

While waiting in the lobby of a bank or credit union, perhaps you have observed signs advertising low mortgage rates. Some homebuyers choose to finance their homes through mortgage companies. However, it is possible to obtain a mortgage loan from your local bank.

Using a local banker may be advantageous. Each mortgage lending institution establishes its own lending guidelines. Moreover, these lenders can pick and choose the type of loans they want to service.

There are various types of home loans. These are intended to help individuals with good credit, poor credit, no credit, recent bankruptcy, etc. Unfortunately, not all lenders offer a range of home loans. Thus, persons with bad credit may have trouble getting approved.

Likewise, banks and credit unions may choose not to service bad credit loans. Therefore, those with a credit score below 680 may not qualify for a traditional loan. If this is the case, these applicants may have to seek alternative financing.

Mortgage Loan Brokers

Because mortgage comparisons are important, many homebuyers bypass local banks. Accepting the first mortgage offer received is not a wise act. Lenders offer different interest rates. The only way to get the lowest mortgage rate possible is to obtain quotes from many lenders.

Mortgage brokers are very useful. Although brokers do not finance home loans themselves, working with a mortgage broker gives homebuyers the opportunity to receive multiple offers from different lenders. Additionally, brokers have access to many types of loans. Thus, persons with a low credit rating can also obtain quotes from different lenders offering bad credit mortgages.

Mortgage brokers are also successful with locating suitable home loans for people with unique conditions. This may include self-employment, no money for closing, real estate investors, etc.

Mortgage Companies – Prime Lenders Versus Sub Prime Lenders

For the best rates and fees, look to a prime lender to give you top financing due to your excellent credit score. For those with poor credit, turn to a sub prime lender for reasonable rates on mortgage loans. You will also find more flexibility with a sub prime in drawing up terms and conditions in your loan contract.

When Prime Lenders Are Best

If you have an excellent credit score and a solid financial base, look to a prime lender to get you the market rates and fees. With near perfect payment history and cash assets, you can bank on getting superb rates.

To get even lower rates, do some comparison shopping online. Working with a mortgage broker can save you time in your search. You can also negotiate further rate reductions by paying points at closing.

But if you are looking at a down payment of 20% or less, you will need to carry private mortgage insurance. Annual premiums cost around a thousand or more. Once your assessed equity value equals 20%, you can then drop the insurance.

Special Cases For Sub Prime Lenders

Sub prime lenders handle financing for special cases, whether that is bad credit or unique terms. For accepting mortgage applications with higher risk levels, sub prime companies charge slightly higher rates.

Of course there are shady lenders who charge excessively high rates and fees. But you can avoid these companies by researching several lenders to find a good deal on a home loan.

Sub prime lenders dont require private mortgage insurance or a stellar credit past. Nearly everyone can qualify for financing; its just a matter of what rates and fees you are willing to pay.

Where To Find Your Lender

Nearly all lenders handle quotes and applications online. If you are unsure about which type of lender to turn to, take a look at your credit report. If you are still undecided, ask for loan estimates from both types of lenders.

Even within each type of lender, there is a lot of variation in loan costs based on the terms you select. So consider all your loan options when comparing rates and fees.

Mortgage Brokers

When applying for a home loan, it can be difficult to ascertain your options and the best deal out there. Mortgage brokers can help you shop for the best loan for your situation.

Mortgage Brokers

A mortgage broker is an independent professional assisting homebuyers with their mortgage needs. Instead of a loan officer for a bank, a mortgage broker typically works with tens or even hundreds of lenders. This independence lets mortgage brokers hunt for loans that fit the credit history and particular lending needs of a person.

Lets assume you have less than stellar credit when you apply for a loan at ABC Lender. The lender pulls your credit report and determines you dont qualify for any of the loans offered by the lender. The lender is going to drop you like a rock and move onto the next potential borrower.

Now, lets make the same assumption regarding your credit score, but put a mortgage broker in the place of a lender. The mortgage broker is going to look at your credit score, income and overall borrowing circumstance. The broker is then going to give you options and a recommendation regarding the best loan for you. Instead of hoping to get financing, you are now in a situation where you are evaluating the best financing options.

Mortgage brokers can help anyone, but are particularly valuable in two circumstances. The two circumstances are bad credit and document overload.

If you have bad credit, even horrible credit, a mortgage broker is going to be able to hunt down loan options. Many people make the mistake of believing bad credit precludes them from getting a loan. It doesnt. The loan terms may require more points or a higher interest rate, but bad credit doesnt preclude home ownership.

For some borrowers, the monstrous amount of paperwork required in the loan process can be overwhelming. When you use a mortgage broker, the documentation is all taken over by the broker and his staff. In fact, mortgage brokers have people known as processors on their staff who do nothing but compile, organize and process all the documentation needed for loans. The do this everyday and are masters of the process.

The decision to use a mortgage broker is often a good one. A good broker is going to help you get the best loan while making the actual loan process a lot easier than going it alone.

Mortgage Interest Rates 101

Many things affect mortgage rates – which is why they fluctuate. So it pays to understand a little about how mortgage interest rates are generated. The more you know about the economic factors that change rates, the more prepared you are to find the perfect home loan at an interest rate that’s perfect for you as well.

Market Conditions
When the Federal Reserve Board raises or lowers rates, there is usually an impact on the rate you will get for your fixed rate home loan, although it’s not as direct as it may seem. The Federal Reserve adjusts federal funds rate, which is the rate at which banks lend to each other. When federal funds rate decrease, we spend more, which can actually increase inflation. Mortgage rates tend to be longer-term rates that are affected by concerns about inflation, as well as other economic indicators like job growth. So it’s more accurate to say that mortgage rates are indirectly affected by the Federal Reserve Board, and more directly affected by what happens every day in active public markets. The market sets the interest rate, and then a margin is added to the index to determine your final mortgage interest rate.

Timing
Since interest rates change daily, the longer a lender locks in a rate, the higher the risk that the market will move against them. Therefore, you pay more (in points) for a longer guarantee. If interest rates appear to be on an upswing, it makes sense to lock in your rate. If they are steadily dropping, it makes sense to float your interest rate so that you can take advantage of a shorter lock-in period, saving you money.

Points
You can often receive a lower mortgage interest rate by paying extra points – mortgage costs that are up-front rather than built into the interest rate. Each point equals one percentage point of the total amount of the loan. For example, one point on a $100,000 loan is the equivalent of paying $1,000 to ensure you get a lower interest rate that saves you money over the life of your loan.

Credit and Payment History
A less-than-perfect track record may make you seem like a high credit risk, which means you’d only be eligible for higher mortgage interest rate loans. If you find yourself in this position, don’t worry – we have loans that could still help you make your dream a reality.

Credit and Payment History
A less-than-perfect track record may make you seem like a high credit risk, which means you’d only be eligible for higher mortgage interest rate loans. If you find yourself in this position, don’t worry – we have loans that could still help you make your dream a reality. Learn more about Bad Credit Loans.

Debt-To-Income Ratio
Your monthly debt obligations are calculated against your current income. The higher the ratio, the higher the risk which could mean a higher interest rate.

Loan-to-Value
The loan-to-value is the amount you need to borrow versus the value of the home you want to buy. The more equity you have or the more money you give as a down payment decreases a lender’s risk, often resulting in a lower rate for you.

Property Type
Lender risk plays a big part in your rate. For instance, a loan for a single-family home is less risky than one for a multi-family home because there are fewer variables. The less risk, the better the rate.

Occupancy
If you plan on living in your new home, you will probably get a better rate versus a loan on a rental unit, which carries more risk for the lender.

Loan Amount
The amount of money you borrow could affect the interest rate you get.

Mortgage Loans After Bankruptcy

Many people believe that once they file for bankruptcy they will have a difficult time getting a mortgage loan. However, there is still hope for being approved even with a recent bankruptcy. If you have bad credit and apply for a mortgage loan, more emphasis will be placed on your income your down payment.

Most lenders prefer to wait until two years after your bankruptcy before considering a person for a mortgage loan. After these two years, it should be relatively easy to get financing. In addition, you will probably be able to get one hundred percent financing. This will happen as long as all your payments have been reported as on time to the credit bureau since your bankruptcy.

If you want to get a mortgage loan before the two year period is finished then you will need a pretty much flawless payment history since the time you filed for bankruptcy. In addition, you will need to provide a down payment. The down payments usually range between three and five percent to get approved.

If you do not have the money for a down payment then you can consider borrowing from relatives. Once you finance your home, you should be able to get a second and third mortgage that will allow you to repay them. However, it is best to check with your lender before doing this since most lenders have regulations on where the down payment comes from.

If you do not want to borrow the money then another option is to look for a down payment assistance program like Neighborhood Gold or the Nehemiah program. Such programs give the seller aid in helping you with the down payment. Normally receiving a down payment from the seller is illegal, but through these programs, it becomes legal.

Obtaining mortgage loans after bankruptcy is becoming much easier today. By searching around you will likely find a lender willing to help you with your mortgage loan.

Mortgage Refinancing – The Facts

Mortgage refinancing is when a homeowner gets a new home loan to pay off their existing one. The benefits of doing this are that they may be able to save money by getting lower interest rates or special deals. Refinancing is not the best option for everyone, though. For a person who is facing financial problems refinancing could spell trouble.

It is common for a person to want to save money on their home loan. A home is most likely the biggest purchase a person will ever make, but that does not mean they have to stick with one lender and pay the same high interest rates forever. Home owners have the option of refinancing to cut their home buying costs. Refinancing involves shopping around for a better deal then the one they currently have.

When shopping around it is advisable to approach a few good mortgage brokers that work with a large panel of lenders, not just one or two. This way they can search the market place to find the right deal for you. This is even more advisable if you have a bad credit history. A good broker will have access to a number of specialist adverse or sub prime lenders who will be able to offer you competitive rates. The same is true if you are self employed and have trouble proving your income.

Many times when a person is facing financial problems they see using their home as a way to clear their debts. While that is an option, refinancing to get out of financial problems is not a good idea. One reason is that should the person be unable to make the new loan payment, then their house is now in jeopardy.

Unless a person is truly sure that refinancing their home to get money to pay off debts is something they can afford and will truly solve their problems, then it is not a wise decision.

Some people refinance to change from a variable interest rate to a fixed interest rate. This can be very beneficial. Fixed rates mean that the mortgage payment never changes and is the same form month to month.

With a variable rate the amount of the mortgage can change drastically form month to month as the interest rates fluctuate. However, with a fixed rate a person has to be careful not to lock in on too high of a rate. They would then lose out when interest rates go down, unless they go through mortgage refinance again.

There are also many lenders out there who are not what they say to be. Mortgage refinance scams are common and can really be damaging. To avoid scams a person should always deal with a trusted lender and read every piece of paperwork completely. If a deal does not seem right then it is best to back out before ever signing anything.

Mortgage refinance can be a very good thing if done carefully. There are also many ways in which it can go wrong. Homeowners need to be aware of everything involved in mortgage refinance so they can get the best possible deal that will save them the most money.

They should also always be aware that they are risking their home should they not carrying through with their mortgage obligations. It is important to make sure everything is in place and understood before ever signing the papers.