Saturday, March 13, 2010

Mortgage Loan Tips for Bad Credit Borrowers


Becoming eligible for a mortgage loan with bad credit was a really intimidating task for the homebuyers in the past. Even now, a considerable number of lenders would not accept a mortgage loan applicant who has a credit score lower than 650. Nonetheless, maximum mortgage loan providers have become more or less flexible. For instance, in the recent past, the FHA guidelines have been made less strict. Loan applicants with bad credit now have higher chances of qualifying for a home loan.

A mortgage loan can be the answer for thousands of people looking for buying a home for the first time. However, if you have poor credit, a number of elements can affect your possibilities of getting approved. Some of those factors are charged-off accounts, unpaid bills and debt settlement. On the other hand, you should do your homework comprehensively to look for other methods that can speed up the approval procedure:

Choose a Useful Home Loan Program

The “Timely Payment Rewards” loan program introduced by Fannie Mae is an ideal option for homebuyers with bad credit. The program has been tailored for individuals with present or previous credit difficulties. At the beginning, the interest rate is bit high. Nevertheless, if the borrower is able to make timely payments for 24 successive months without default, then he might be eligible for a 1% rate cut.

Homework on Mortgage Loan Necessities

Many months prior to purchasing a home, prospective homebuyers with bad credit should communicate with various lenders and question them regarding mortgage prerequisites. The minimum credit score requirements differ from one program to another. For example, a few lenders would label an aspirant as subprime if his credit score is below 650.

Clarify Your Credit Condition

If unavoidable conditions accounted for your poor credit, some mortgage loan providers would accept a written clarification. This stipulation makes adjustments for homebuyers with a past history of good credit. Satisfactory causes might include short-term disability, job loss, severe sickness and so on. Written clarification should be sent along with adequate proof (unemployment pay stubs and medical bills).

Don’t Postpone Credit Enhancements

In spite of the fact that you have taken steps to improve your credit (rectifying credit mistakes and repaying debts), it might require up to 45 days for modifications to reflect on your credit report.

Go to a Financial Advisor

Almost every poor credit is regarded as a result of bad money management. Before sending a loan application, you should go to a financial advisor. Following the evaluation of your credit, assets and debts, he can provide perceptive recommendations and formulate a strategy that would assist you to better your credit and buy a home.

8 comments:

Dorothy Rimson said...

That was a nice resourceful blog!!!

Debt Consolidation said...

Hey wonderful post. I found your site via Blog Catalog and cant seem to get posted on there. in any way ... I take your saying to heart. very well done "Money is a need and business is a way to get it "

Thank you.

Ab Kr said...

Great Financial Solutions, now the situation is improving for Loans in US

JOHN said...

ITS A VERRY NICE BLOG AND I FOUND YOU HAVE CLEARLY HELPING PEOPLE WHO WANTS TO BYU THEIR DREAM HOME.YOUR BLOG HELP TOSE PEOPLE TO MANGAE THEIR Financial aspect. before going for a loan the person who is apllyng should have a Finance Mesurement . your blog help them to short out that problem

Mortgage knoxville said...

I am searching for the option of mortgage loan I want to know some details that how much time it takes in process of sanctioning of the loan at what is the range of annual interest i have to bear.

Genny Stutesman said...

It will be less easier for those who have bad credit to apply for a mortgage loan, so it may take extra effort to convince lenders. I hope these tips will make their burden a little bit lighter.

takeshi007 said...

A bad credit mortgage lender helps you get your loan approved much faster than programs offered by credit unions and banks. But you have to pay the price to get a bad credit loan. The loan you get will carry a higher rate of interest and will have higher closing fees.

Click here to get mortgage advice

Selena Manchester said...

When you have a bad credit score, it will be good for you to look for a mortgage broker. He will help you analyze your credit file and recommend you to a mortgage loan that suits best with your credit standing. A broker has so many connections with lenders. He may be able to find one who’s likely to approve your application even if you don’t have a good credit score. He can effectively help you get the loan that will meet your needs.