Bad Credit Mortgages with No Down Payment
- Tom Kerr - MortgageLoan.com
When it comes to finances, many Americans have skeletons in their closets. If you're in need of debt consolidation help, you aren't alone. A record number of consumers across the U.S.- both high-income earners and lower salaried workers-are faced with the challenge of getting a mortgage while saddled with a bad credit history. For that reason, many legitimate lenders have created so-called "bad credit mortgages" to help people in similar situations.
No money down
The most popular source for bad credit loans is the "sub prime" lender. These mortgage companies deal almost exclusively with borrowers who have poor credit, bankruptcy, and other debt management problems. They even offer financing with no money down, great news for those trying to buy homes when real estate prices are high. Expect to pay higher interest rates in return for the risk the lender is taking by providing a mortgage to someone with less than stellar credit. That's often a small price to pay for the security of home ownership. After you get back on your feet, of course, it's always possible to refinance into a conventional type of loan at more attractive and competitive rates.
Qualifying for bad credit mortgages
A credit score of 600 or higher will put you in a better position for borrowing. If your score is lower, you can still qualify for a bad credit mortgage if you have large cash reserves. If you can demonstrate that you have enough extra savings to support yourself and pay your outstanding bills for six months or more, you can make a strong positive impression on a lender. You might also obtain an 80/20 loan, which lets you borrow your principal plus your down payment, effectively creating a zero-down transaction.
Even if you're doing business with a major bank, be sure to ask if they give bad credit mortgages. Almost all the big banks offer this kind of loan, so you have many options to take advantage of. There's no need to hide those skeletons any longer. A bad credit mortgage can help put the meat back on the bones of your credit, and turn your rating healthy once again.
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