If you are considering the purchase of a home, or refinancing the one you already own, the first thing you ought to do is check out your credit rating. Just because you have a poor credit rating that does not mean that you cannot acquire a mortgage. There are bad credit mortgage lenders who are prepared to work with you. A mortgage procured in this fashion is the same as a standard mortgage, except that you can expect to pay a higher interest rate, and perhaps you will require a higher down payment.
However, not all mortgage lenders for bad credit ask for a large down payment or charge high interest rates. For example, if you live in, or want to move to, an area hard hit by foreclosures, you could consider purchasing a Fannie Mae foreclosure home through a Home Path Mortgage. These loans are available for the purchase of a primary home or an investment property. Furthermore, there are special provisions to allow people with bad credit to participate. All that is required is a three percent down payment. The down payment could come from your own savings, a grant or loan from a nonprofit organization, state or local government or even your employer. Mortgage terms can be flexible. Although the area and housing choices are restricted, this is a possible option for some people, and worth looking into.
After the sub-prime meltdown, the Federal Housing Administration (FHA) has loosened its requirements, and has become a mortgage lender for people with bad credit. It is possible to obtain thirty-year fixed rate mortgage, even with a credit score of 580. Nevertheless, you will need a ten percent down payment. However, if you have declared bankruptcy or had a foreclosure recently, you need to wait two or three years before you can procure a FHA mortgage.
In your search for mortgage lenders that work with bad credit one of the more informative appointments you can have will be with an experienced professional mortgage broker. Your mortgage broker will act on your behalf to find your best mortgage deal, whether that deal comes from a bank or private lender. Make sure that the mortgage broker you are working with is in compliance with banking and finance laws that exist in your area.
If you are desperate, a hard moneylender will loan money to almost anyone. Just the same, many people would consider them bad credit home mortgage lenders. Although they are willing hold mortgages on primary homes, their main interest is investment properties that flip over quickly. In order to procure a mortgage with a hard moneylender, you will need a very large down payment, and interest rates will be extremely high. Best to think of this type of loan as extremely short term. Quickly raise your credit score, find a more conventional lender and pay off your hard money mortgage.
Mortgage lenders for people with bad credit can do more than secure a reasonable mortgage. This can be your chance to clear up your credit difficulties. You may be able to consolidate all your bills into one monthly mortgage payment. No more dealing with collection agencies or late payment fees.
Many Americans find themselves in a credit crunch, not because of anything they did, but because of the changing global markets. Although it is not fair, conventional lenders have turned their backs on many hard working people who have fallen on hard times. The best mortgage lenders for bad credit are those who will look beyond a current credit score, understand how you got where you are and how you can pull yourself out. If you have done the best you could, you are entitled to a break.