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Mortgage lenders can acquire a home even if you have bad credit. When dealing with a mortgage lender, you can expect easier application requirements. You can also choose suitable mortgage terms, from a fixed rate to an interest only mortgage. Most importantly, you can expect affordable rates from lenders who will provide you with genuine customer service.
1. Easier requirements for a mortgage application
You can look forward to easier application requirements than the mortgage lenders. Finance companies that deal primarily with people with poor credit will not automatically decline your application if you have bankruptcy or foreclosure on your credit report.
Instead they will look at your entire financial history, including your monthly income and assets. Then they will offer you a financing package. The better your credit and assets, the better your rates. Mortgage rates range from 2% to 12% above market rates.
2. Flexible mortgage terms without PMI
You will also have many choices when it comes to your terms, and subprime mortgage lenders do not require private mortgage insurance (PMI). So dropping less than 20% won’t cost you hundreds of premiums annually. You can even find zero or zero credit loans.
It is important to remember that terms also affect your rates and payments. For the lowest payments, look into an adjustable rate mortgage with a cap. You can also find ARMs that refinance after two years to lock in rates.
Points can save you money by lowering prices. But, you may find that a better strategy is to rebuild your credit and then refinance at lower rates. If this is your plan, make sure there are no penalty fees for early repayment.
3. Reasonable interest rates for homes from legitimate mortgage lenders
Bad credit does not automatically mean high rates. Legitimate lenders will offer you reasonable rates. The key is to find it. Online sites can help you find great prices when asking for quotes. Search through individual brokers and websites to find those hidden deals.
Online lenders remain competitive with their rates and customer service. Therefore, quite often you can find offers that waive fees or do not require points. Make sure you research all of your options before signing any contract.
