BAD CREDIT SOLUTIONS
Bad Credit Mortgage Loans – How
To Get Approved
by: Carrie Reeder
Persistence is the key working toward getting approved
for a bad credit mortgage loan. There are many factors
that you, as a borrower have control over that can help
you get approved faster and easier. There are guidelines
that most sub-prime lenders go by that, if you know them,
can help you move through the process without getting
stuck, unable to get financing.
If you have a bankruptcy or foreclosure, even if they
are recent, do not despair. Many sub-prime or bad credit
mortgage lenders have what’s called, guidelines for
bankruptcy or foreclosure seasoning. That means that they
have a set amount of time that must go by from the time
of a bankruptcy or foreclosure before they will lend to
a borrower. Usually this time is 2-3 years, but many sub-prime
lenders have no seasoning time, which means, if your credit
score is above a certain point, you could get approved
the day after your bankruptcy discharge. Other sub-prime
lenders have bankruptcy or foreclosure seasoning of 6
months or a year. The biggest factor here will be your
credit score.
Sub-prime or bad credit mortgage lenders will look closely
at your credit score. In order to get 100% financing with
bad credit, lenders will usually need to see you have
a credit score of at least 600 or higher. There are quite
a few things you can do to raise your credit score to
be above this 600 mark. Here are a few suggestions:
1. Check your credit report for inaccuracies. Make sure
all accounts included in bankruptcies and foreclosures
are reporting accurately. If they show up as an open collection
or unpaid account, charge-off or something else, this
could be unnecessarily hurting your credit score. It will
look like another, separate credit blemish instead of
just the one. Make sure the bankruptcies and foreclosures
are reporting accurately. Make sure accounts that are
paid off, show up as being paid off, or accounts that
are closed, show up as being closed. 2. Pay-off any small
collection accounts or past due accounts that you can.
Every account that you pay off will help boost your score.
Once you have done this, get a letter of notification
that the account is paid off and talk to your lender.
Most lenders have programs where they can, for a $75 fee
per item, provide proof to the credit bureaus that an
account has been paid off and have your credit and credit
score appropriately adjusted within a day or two. This
program is sometimes called a “wrap it up” service.
If you are in a hurry to get financed, this may be worth
it to you. 3. Pay down open credit line balances. If you
can even pay down the balances on any open lines of credit,
this will boost your credit score. Your credit score is
lowered when lines of credit are maxed out. You can make
good use of your money by paying down credit card balances
to boost your score.
Once you have used some of these techniques to boost your
credit score, be persistent about contacting and applying
with many different bad credit mortgage lenders. Many
bad credit mortgage loan brokers claim that if they can’t
do the loan, then no one can. That is simply not true.
All mortgage loan brokers have connections with many different
lenders and loan programs. What may be impossible with
one, can be very possible with another broker. If your
score is around 600 or slightly higher, you will probably
have a pre-payment penalty. Pretty much all bad credit
mortgage loans will come with a pre-payment penalty. Talk
to your lender about the details of the pre-payment penalty.
Find out how long the penalty will last and exactly how
much money the penalty is. How much is the fine for pre-payment
on the loan? This is an important factor to consider when
comparing lenders.
To get a approved for a bad credit mortgage loan, be persistent,
work on your credit score as much as you can to get it
above that 600 mark and apply with or contact many lenders
to compare mortgage loan programs.
Visit here to see a list of our recommended lenders for
bad credit mortgage lenders: www.abcloanguide.com/lessthanperfectcredit.shtml.
About The Author
Carrie Reeder is the owner of http://www.abcloanguide.com.
ABC Loan Guide is an informational loan website with informative
articles, the latest finance news and lists of recommended
mortgage lenders.
carrie@abcloanguide.com |
