Home Loans with Bad Credit
Nationwide Home Buying and Refinancing for People with Poor Credit Scores and Limited Trade lines
Did you know that nearly 40% of consumers in the U.S. have experienced a financial setback in the last few years that has caused their credit score to suffer? The demand for bad credit home mortgage programs has surged since the recession resurfaced. According to CreditReport.com, the average credit score dropped nearly 50% in the last 48 months? With more and more people needing a bad credit home loan it has helped make the rates more competitive. Even the Federal Housing Administration is approving bad credit home loans on applicants with fico scores greater than 500.
Save Money and Improve Your Fico Scores with Low Interest Home Mortgage Loans for Bad Credit
Utilize our bad credit home loan program that offers second chance financing in 50 states. Millions of borrowers have suffered with limited or damaged credit and many lenders are pleased to be able to offer bad credit loans for refinancing or home purchase. Our home financing unit continues to provide subprime financing for new home purchase and refinance transactions.
Government home financing is more popular than ever because FHA continues to ensure fair lending with flexible credit guidelines. Now you can buy a home or refinance your adjustable rate loans even if you have credit scores below 600. Finding a home loan with bad credit allows both fixed and adjustable rate terms with options for interest only payments for qualifying borrowers.
Refinancing a bad credit home mortgage or adding a 2nd loan can help you lower interest rates and reduce monthly payments. Often times, home loans can assist you credit rebounding and in most cases will raise your credit scores with timely payments.
How to Buy a Home with a Bad Credit History
Owning a home has long been a cornerstone of the American dream, and with good reason. It provides you with the chance to have a place to call your own, a refuge that you and your family can enjoy together. It's also a major investment, and one that can reward you in many ways. But for those with a bad credit history, it's often more difficult to secure a home loan than they realize.
Luckily, today's lenders offer several different options that can help those with bad credit history find a home loan and purchase the property that they're looking for. There are a few basic points to understand here, but in general the process for people with damaged credit will be very similar to buying a home with decent credit.
Knowing Your Options
The reason that it's now possible to buy a home with a bad credit history is simple – there are loans designed specifically for this. For example:
- FHA Mortgages– These loans are insured by the federal government and have much easier credit score qualifications than traditional loans. Often, these loans are based more on income levels and down payment amounts than credit. They're easier to obtain and are a great option for those looking to secure a home loan for poor credit history.
- VA Loans – Similarly, these loans are available through federal government backing and are designed for veterans and enlisted soldiers. They offer good interest rates and can be obtained with a lower than normal credit score.
- Traditional House Loans – Lenders like Fannie Mae and Freddie Mac offer alternative credit standard loans as well. These loans are designed to help those with poor credit, and can be an option to look into as well.
Your interest rates will be somewhat higher than with a traditional loan because you're an increased risk in terms of your credit score. Rates aren't terrible, but it's worth remembering that you may not get an interest rate as low as your friend for who has a 700 credit score and saving for a 20% down-payment with these home loans for bad credit.
Steps to Take
If you're planning on buying a house but have a poor credit history, there are a few steps you can take that will help you along the way. Here are some things to do.
- Maintain employment for a long period of time. Showing secure, stable employment is a key part of being able to secure a loan – especially a poor credit loan.
- Save up a decent down payment. In some cases bad credit loans will require as much as 10% to 20% down, but some loans like FHA loans may have just a 3.5% down payment rate if your score is at least 580. Either way, a down payment is important.
- Be sure to look at government backed loans. They've been mentioned above, but again – an FHA or similar loan is worth looking at since it offers easier qualification terms.
- Consider an ARM loan if you're only going to be living in a home for a few years. These could be easier to qualify for and offer lower rates initially. Those rates can increase dramatically, so this is only an option if you're not planning on staying in a home for many years.
In short, it's more possible than ever to qualify for a home loan and buy your home – even with poor credit. Just review your options and know what's out there.
Options for home loans with bad credit are available depending upon and equity and debt to income ratio. Homeowners often have a significant financial edge when it comes to consolidating bad credit and high interest loans. If you took out a poor credit home loan a few years ago it may be in your best interest to compare loan options today because lower rates may lead to lower mortgage payments. Nationwide Mortgages does not offer debt relief or legal advice. Consult with a loan officer, because not everyone will qualify for a bad credit home loan.
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