Bad Credit - Mortgage

Bad Credit Home Loan
Bad Credit Mortgage
Bad Credit Equity Loan
Bad Credit First Home Loan

A person with bad credit should be able to get a first home loan if they have a good source of income and own a home.

The reason that a person with bad credit can get a home loan is that a home loan is a secured loan. A home loan is guaranteed by your home which can be foreclosed upon so lenders can cut borrowers some slack on such loans. This means that the lender has less risk of loosing their money when they make such a loan.

Bad credit first home loans have higher interest rates

A person with bad credit will have to pay a higher interest rate when they take out a home loan. The lender is able to charge higher interest on a home loan to a person with bad credit because there is a higher risk that they won’t pay the loan off.

A borrower should be able to get a better interest rate on a bad credit first home loan because it is a first home loan. Since it is a first home loan there is no history of default or missed payments. Unfortunately a lender might charge a first time borrower more because there is no history to prove that they will pay off their loan.

How to get better interest rate for the first home loan

The way to get a better interest rate and terms on a bad credit first home loan is to shop for such a loan online. There are many online lenders that provide such home loans to borrowers. Many of these lenders are able to offer better interest rates because they have a lower overhead.

Another advantage to shopping for a home loan online is that some lenders such as Lending Tree let you compare loans from several different lenders at once. This saves time and it lets a borrower see what their options are.

The way to choose which home loan to take out is to add the cost of the home loan to your mortgage payment and other monthly bills. Then see how much money it will take out of your monthly income. That way you can determine if you can afford to pay the home loan off before you take it out.

One drawback to home loans is that it eats up the equity of your home. If property values in your area are falling you shouldn’t be taking out additional home loan. This is so because you could find yourself in a situation where the amount of money you owe on your home is higher than your home’s value.