If you tried to get a bad credit mortgage in the past the chances of getting approved were pretty bad. All that seems to have changed for the better and these days bad credit mortgage lenders are more than happy to approve home loans for borrowers with all types of credit scores. Even the large banks and mortgage companies are jumping into the fray, meaning increased competition, more approvals and lower rates for everyone. Bad credit mortgage lenders know that this is a large segment of the home loan arena and it is also very profitable for them.
Both traditional mortgage companies and bad credit lenders determine your credit worthiness by looking at your credit score, also called a FICO score. These scores are reported by three major credit reporting agencies, Experian, Trans Union and Equifax. The higher your FICO score is the more likely you are to get a good rate on a loan, however the reverse is also true. Anything lower than 620 is considered bad credit by most lenders and most mortgage lenders won’t even offer you a home loan if your score is below 500.
While you can get approved for a bad credit mortgage pretty easily, the bad news is that some mortgage lenders will take advantage of your poor credit score situation and will hit you with dramatically increased interest rates. This is great for the lender, who makes more money from the interest, but really bad for you. Chances are if you have bad credit you’re in no position to pay exorbitant interest rates on your mortgage. Mortgage lenders will also require those with bad credit to put a 20% down payment on their home purchase which actually turns out to be good news since it means a smaller loan and smaller monthly payments.
Bad credit mortgage lenders are everywhere these days and they are especially noticeable on the internet where the cost of advertising is still somewhat cheap compared with traditional advertising places. This is also a benefit for us as lenders since it is both cheaper and quicker to get a mortgage online in many cases. It takes just minutes to fill out an online mortgage application and you can find out if you’re approved within minutes. This also makes it easy to get multiple quotes and compare the mortgage lenders rates.
Now you can take advantage of the power of the internet to help you get a home loan even with bad credit. Finding a bad credit mortgage lender is now quicker, easier and cheaper than ever. By searching online you can quickly get quotes from several companies and compare them to accept the best one.