Bad Credit Mortgages Are Possible

Written By Unknown on Sunday, September 7, 2014 | 9:55 PM


There's a secret I want to tell you. Bad credit mortgages exist and having one won't rip you off. Although every one would like to live in a house or at least a great condo or townhouse, not every one thinks they can. Why? Because they have bad credit. They paid their bills late, didn't pay back a loan, borrowed too much money or even declared bankruptcy. When these things happen, some people believe a bank or creditor will never give them a bad credit mortgage. They're wrong. Banks give out mortgages to people with bad credit all the time and they're not all high interest rip offs.

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Home ownership is up but so are personal bankruptcies. How is this possible? Lenders are very willing to give bad credit mortgages to prospective homeowners. With higher interest rates lenders are more willing to take risks. As people got new mortgages and refinanced old ones during times of low interest rates, there are not enough people around when interest rates rise. To keep up their revenue and profits, lenders seek out people with bad credit. And why not? The actual house is their collateral so they're much less risk than loans without collateral.

As I showed above, it is possible to get a bad credit mortgage. Here's what to expect. The lenders will probably want a down payment. While the traditional amount is 20% of the home purchase, lenders will take anything in between. Of course, anything below will probably require home mortgage insurance, which can be 1% of the loan amount. It's best to avoid this but if you can't, it's much better to get the mortgage than not. Another thing to expect is you'll probably have to pay higher interest rates. If you're more of a risk, which is what your bad credit rating says, the lenders need to be more compensated for that risk. While this extra cost will hit you initially, when or if you improve your credit rating you can always refinance and get better interest rate.

There are different types of mortgages. The two most popular forms are fixed rate mortgages and variable rate mortgages. Fixed rate means that the interest rate you are given will stay the same for the entire mortgage period. Variable mortgages the interest rate changes with the national interest rate. Besides these two, they're tons of variations of the two. No down payment loans, interest only loans, reverse mortgages and more. The first one is self explanatory, interest only means your payments only cover the interest charges on the loan and reverse mortgages pay you money but slowly you lose equity in your home. It is best for retired people who want an easy way to get money out of their homes. There are more options today than ever. With all these flexible plans, it is easier to get a mortgage that fits you.

Another aspect of getting a home mortgage loan with bad credit is home equity loans. If you have a down payment you can immediately get a home equity loan for the value of your down payment. The interest rate you'd expect is higher than if you had better credit. Since your home is collateral, the interest rates won't be too high. With a home equity loan, you can pay off your other outstanding loans and improve your credit. Having one payment at a much lower interest rate than credit cards or payday loans is much easier. Once you have a home mortgage loan, you can improve your credit and improve your finances.

It's been proven. It is possible to get a mortgage with bad credit. These bad credit mortgages offer home ownership to those who thought they wouldn't qualify. You will pay higher interest rates and might have to put money down, you will have your house and your house can let you improve your credit. So if you have bad credit and want to get a home mortgage don't wait any longer. You can get a bad credit mortgage today.

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Author : Unknown ~car loans for bad credit

Blog, Updated at: 9:55 PM

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