Bad Credit Mortgages: Making the Impossible Possible

 

If you have bad credit, buying a home may seem impossible, especially if you’ve recently filed for bankruptcy. On the contrary, borrowers with bad credit do have options.When applying for a home loan with bad credit, three things are key:

• Present circumstances — are you paying your bills on time? Will your current salary suffice for a mortgage payment?
• What caused your bad credit — did you file for bankruptcy? Did your credit card debt become insurmountable? Did you have a medical emergency?
• Your credit score — your FICO score factors into the amount of financing you’ll qualify for as well as the rate you receive.

Bad Credit but Steady Income?

Many lenders can assist you if you have bad credit. Now more than ever before, bad credit mortgages are much more commonplace. One of the first and most important items to come under scrutiny will be your current source of income. Lenders will want to know you can make your mortgage payments on time. Your job security will also be looked at before the lender approves your bad credit home loan.

Credit Score

Bad credit will not prevent you from getting a loan, but lenders will be examining your credit score and the reasons why your credit is bad. Did you recently file for bankruptcy? If your bankruptcy was recently discharged you might need a 30% down payment. However, if it has been several years, and your credit score is over 580, then you might even qualify for 100% financing.Lenders want to loan you money. Qualifying for a bad credit mortgage does not have to be problematic. You need to ensure you meet the right qualifications so your lender or broker can find a program that will best fit your circumstances. Take the first step, call lenders, and find out if you qualify for a bad credit home loan.