Bad Credit? You Can Still Get a
Mortgage to Buy a House
by: John R. Blakefield
Unfortunately bad credit can haunt you for the rest of your life. If
there are bankruptcies or foreclosures on your credit report, you know
how hard it is to get any line of credit. Lenders and creditors simply
look to as a too big of risk to loan money to.
But we know that even though mistakes were made in the past, your
financial situation and behavior can be reformed. Some lenders
understand this as well, and the sub prime lending market has grown and
become very competitive. The lending market can be broken up into two
main segments, the prime, those with average to good credit who are not
huge financial risks. Then there is the sub prime market, with those who
have poor to very bad or no credit.
Lenders can give ratings to a certain sub prime client giving them a
rating from A-D: A being the best rating and D being the worst. When you
fall into the C or D category, you are considered very high risk and
more likely to default on a loan than that of a person with an A or B
rating.
Sub prime lenders generally give loans to even the highest of risk
cases. They look at the same information that a prime lender would look
at to evaluate the type mortgage you can have. They look at credit
history, income, expenses and long term debt. If you do have
foreclosures, bankruptcies, delinquent payments, and outstanding debt,
they will take all of this into consideration. If you can show steady
employment, a good income, an effort to pay back the money you owe and
are doing it in a timely fashion, you are more likely to get a better
rate than that of someone who is not taking any steps to fix their
credit.
Sub prime lenders can loan the money you need by protecting
themselves. They do this through higher rates and fees that prime
lenders would not charge. Be careful, because some sub prime lenders
will take advantage of your poor credit history and charge a ridiculous
amount in fees and charge you a too high of interest rate even for a
poor credit case.
Fortunately for the consumer, this sub prime market is extremely
competitive and you do not have to accept the first lender who offers to
loan you money. You actually have the luxury to shop around and compare
rates, even for the worst of credit cases! So check online for tools
that can aid you in finding and comparing sub prime lenders. The
internet is a good place to start your research. You can also ask for
referrals from family, friends and even local bank.
Don't allow credit mistakes in the past to dictate how you live your
life today. Buying a home is still an option regardless of your credit
history. And, as long as the sub prime market continues to be
competitive, you, the consumer is at a huge advantage.
It is always a good idea to take steps to repair your credit, and
buying a home can aid in this. If you make you mortgage payments on time
every month, then you can watch your credit grow! Sub prime lenders
specialize in this area, so allow them you help you make your credit
score even better! Be sure the sub prime lender you use is trustworthy
and qualified. There are sharks in the industry, so be sure to ask for
referrals and look at licenses. So go buy your home and repair your credit at the same time! Take
advantage of the opportunities you have at your fingertips.
About The Author
John R Blakefield is a mortgage and real estate specialist. For
more information, articles, news, tools and valuable resources on
home mortgages or investment loans, refinancing, debt solutions,
visit this site: http://www.scourtheweb.com/mortgage/. |
