Keyword: bad credit mortgages
Word Count: 394 words
Exact keyword used: bad credit mortgages (10 including title)
Bad Credit Mortgages
Is there such a thing as bad credit mortgages? Absolutely! Although the same factors apply to people with bad credit, no credit, hard to prove income and too much existing debt.
Less-than-perfect credit – that simply means your credit rating is poor. You have a history of non-payment on some of your debts, a recent divorce, a bankruptcy or other credit problems can usually find a bad credit mortgages lender willing to help them.
Hard to prove income – this applies to most elf-employed people. Unless your business is incorporated, financial institution are skeptical of your reported income statements. Unfortunately this will probably make you eligible for only a bad credit mortgage.
Too much existing debt – Most financial institutions will turn you down if they think you have two much debt. They use formulas to determine what is considered too much. Unfortunately the formulas use a “typical person’s” expenses to make the decision.
Bankruptcy or Foreclosure – bankruptcy and foreclosure are serious impediments to getting a new mortgage, You will have to convince the lender that something has dramatically changed to make you a reasonable risk even for a bad credit mortgages.
What kind of terms can you expect from bad credit mortgages?
if you have any of the risk factors listed above you can expect some or all of the following things when getting bad credit mortgages:
Higher interest rates – the interest rate will be higher. How high will depend on exactly why you need to get bad credit mortgages.
Higher down payments – since you are considered to be a much greater
risk, you will usually be required to pony up a substantial down payment
in the neighborhood of 20% to 40% to get a reasonable interest rate. The
less money you put down, the higher the interest rate will be.
Higher loans fees – you can expect to pay at least twice the going
rate. So, if two to 3 points is typical, you can expect to pay 4 to 6
points.
Higher service fees – Mortgage payments late fees are typically around 5%, don’t be surprised to be charged closer to 10%.
It will definitely be more expensive but it is possible to get bad credit mortgages. On the bright side, if you pay your bad credit mortgages on time, you can refinance in two or three years and get the standard rates.