Bad Credit Mortgage
If you really want to purchase a home and have the income to support a payment, you may wonder if it is possible even if you have poor credit. There is a type of mortgage called a bad credit mortgage that is designed for people with less than stellar credit. Here is some information that will help you understand how to search and find loans for people with bad credit
When people discuss a bad credit mortgage, they are usually referring to either a government-backed or a conventional mortgage that is designed for individuals who have a lower credit score. There are usually more flexible guidelines relating to credit scores and history. This type of loan is available for both first-time mortgages and mortgage refinancing.
FHA and VA loans
FHA and VA loans are very popular vehicles for those looking for a bad credit mortgage. Because these loans have lower requirements for credit scores, it makes it easier for people to qualify. They are backed by the Federal Housing Administration, so lenders are often very willing to use them for both a mortgage refinance as well as a first mortgage.
The other benefit to these loan programs is that they require a lower down payment than a conventional loan. Often, when a person has a lower credit score he may also struggle with having a large amount of cash on hand for a down payment. With the generally low interest rates that these loan programs offer, the monthly payment can often be low enough to really help out individuals on a tight budget.
How to qualify for a bad credit mortgage ?
To find out if you can qualify for a bad credit mortgage, you will need to get in touch with a loan officer. He will ask for information and documentation of such things as your actual income, often using paycheck stubs, your credit history, and your employment history. Your loan officer will be able to use this information to let you know if you can qualify for any of their loan programs. As mentioned, if you are qualified, you can use the loan for a first mortgage, a mortgage refinance or even a 2nd mortgage or 2nd mortgage loan refinancing.
Just because your credit scores aren’t perfect, it doesn’t mean that you can’t ever purchase a home. By using these types of loan programs you will be able to get a loan with a payment that you can handle. The only way to find out if you qualify is to talk with a loan officer and fill out an application.
If you don’t qualify right now, you can work on increasing your credit score and try again in six months or so.