Home Loans With Bad Credit: Tips to Get the Money You Need for a New Home

Shopping for a home can be a really exciting time in your life. Finding the right place to put down roots and raise a family is one of the most important decisions that you will ever have to make. However, for those with bad credit, the dream of home ownership can seem a bit distant. No matter the reasons for your bad credit score, the fact is that finding a home mortgage can be hard with the best of credit conditions these days. There is still hope, though and bad credit home mortgage loans are still available online.

Reality Check: Credit Still Matters

Though there are home loan companies who will be able to help you finance your new home purchase, there will still be penalties incurred because of your credit history. Be prepared to have to pay a higher interest rate and likely be subject to higher closing costs because of this reality.

Using home loan companies does provide you with some relief, however, because they can get you a mortgage approval when the traditional banks and credit unions cannot.

Before You Talk to Anyone

There are several important steps that you should take before you even begin the process of finding a bad credit mortgage loan. First, make sure that you review your credit report. Having so-called “bad credit” is one thing, but not knowing why your credit is bad is another. Make sure you understand why your score is low through reading your reports. Also, this will give you an opportunity to look over all the details to make sure that your bad credit score is not a result of a miscalculation or case of stolen identity.

Also, in order to preserve the credit that you do have, make sure that in the months leading to your mortgage hunt you put off opening or closing any other financial accounts. This process has the effect of temporarily lowering your credit score and could count against you when you are going through the mortgage qualification process.

Finding the Right Lender

Bad credit home loans are no different than regular mortgage loans in that the best shot you have at getting the best deal is to shop around. Make sure that you identify several potential bad credit lenders before deciding on one. This way you can look at all the deals on the table and identify the one that is right for you. Remember, even though bad credit will cost you more in terms of interest rate, that does not mean that you need to settle for a bad deal; there is a happy medium that can be reached if you find the right lender.

A Final Option: Take Your Time

There are many lenders online today who can help you work through the details of finding a home loan with bad credit. However, the penalties that you will have to endure will not change, even if the fine print surrounding them does. If you are serious about home ownership, it may be best to take time to build up your credit score again through responsible repayment of your current debts as well as a general increase in your assets. This will be your best tool in finding the home you want and a mortgage that you can afford.

If you have no other option, however, it is nice to know that bad credit mortgages are still out there and represent a viable alternative to getting into the home you want at the fastest rate possible, even if that means spending a little more money to do so.

Get A Student Loan With Bad Credit: A How To Guide

Having bad credit due to poorly made financial decisions earlier in life is certainly a hard cross to bear. Especially if you wish to better your lot through an education, trying to finance such activities can be nearly impossible if your credit score is low. But there is no reason to use your bad credit as an excuse not to pursue your dreams, there are many bad credit student loan options available if you know what to do and where to look.

Get Counseling

Once you have made the decision to attend a particular school, your first step should be to contact that school’s Financial Aid office to discuss your options. Many schools will provide free credit counseling or refer you to someone who can counsel you specifically related expenses and money incurred for the achievement of a higher education. Oftentimes, if a student is not approved for a traditional student loan, a bad credit student loan counselor will have the resources to direct that student to the proper private lenders who can and will offer loans to students with bad credit.

Federal Student Loans

The best way to get money for college is to use the programs sponsored by the government that offer to lend a certain amount of money each year to students at a low fixed interest rate. These loans, called Stafford and Perkins loans, are available to any US college student and often do not require a credit check.

Private Student Loans

Though government-secured loans are the best choice for college, if they do not provide enough money to cover all your expenses, there are other programs such as Sallie Mae and other private banks like Wells Fargo who offer student loan options. Oftentimes each institution will have a separate loan program designed for those needing student loans and who possess bad credit. These programs will offer different rates, fees and services. Since there are so many players to consider, it is really important that you shop around and compare the packages that each one offers against the others.

Co-Signers Provide another Option

If you cannot qualify or are uncomfortable taking a private loan to pay for school by yourself, then the next option that you have is to find a co-signer for your student loan. Therefore, your parents can help you if they have good credit. Though the burden to pay the loan is yours, their credit rating will help you to get better interest rates. It is important to remember, however, that your failure to repay a student loan that has a co-signer will negatively affect that person’s credit as well. It is therefore important to discuss this choice with your loan counselor and your co-signer.

Take Your Time

The final option that you have available is credit repair. That is, even though your ultimate goal is to go to college and get a degree, you may be better off if you delay that for a while in order to work on repairing your bad credit. You can do this by making all payments on loans and credit cards on time, keeping track of your monthly finances as well as working to pay down your overall debt. You will also want to review a complete credit report to make sure that all the information on there is accurate and that you are not being penalized for something that you did not do.

Working With Bad Credit Mortgage Lenders

If you tried to get a bad credit mortgage in the past the chances of getting approved were pretty bad. All that seems to have changed for the better and these days bad credit mortgage lenders are more than happy to approve home loans for borrowers with all types of credit scores. Even the large banks and mortgage companies are jumping into the fray, meaning increased competition, more approvals and lower rates for everyone. Bad credit mortgage lenders know that this is a large segment of the home loan arena and it is also very profitable for them.

Both traditional mortgage companies and bad credit lenders determine your credit worthiness by looking at your credit score, also called a FICO score. These scores are reported by three major credit reporting agencies, Experian, Trans Union and Equifax. The higher your FICO score is the more likely you are to get a good rate on a loan, however the reverse is also true. Anything lower than 620 is considered bad credit by most lenders and most mortgage lenders won’t even offer you a home loan if your score is below 500.

While you can get approved for a bad credit mortgage pretty easily, the bad news is that some mortgage lenders will take advantage of your poor credit score situation and will hit you with dramatically increased interest rates. This is great for the lender, who makes more money from the interest, but really bad for you. Chances are if you have bad credit you’re in no position to pay exorbitant interest rates on your mortgage. Mortgage lenders will also require those with bad credit to put a 20% down payment on their home purchase which actually turns out to be good news since it means a smaller loan and smaller monthly payments.

Bad credit mortgage lenders are everywhere these days and they are especially noticeable on the internet where the cost of advertising is still somewhat cheap compared with traditional advertising places. This is also a benefit for us as lenders since it is both cheaper and quicker to get a mortgage online in many cases. It takes just minutes to fill out an online mortgage application and you can find out if you’re approved within minutes. This also makes it easy to get multiple quotes and compare the mortgage lenders rates.

Now you can take advantage of the power of the internet to help you get a home loan even with bad credit. Finding a bad credit mortgage lender is now quicker, easier and cheaper than ever. By searching online you can quickly get quotes from several companies and compare them to accept the best one.