Bad Credit - Mortgage

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Getting a Mortgage With Bad Credit

Even with the tightening of the mortgage market caused by the recent economic downturn it is still possible for a person with bad credit to get a mortgage.

Those with bad credit will have to search a little harder to get a mortgage. They will also be expected to pay a higher rate interest and adhere to stricter terms. Fortunately it is still possible for a person with bad credit to get a good deal on a mortgage if they are willing to shop around for one.

Mortgage with bad credit online

A good place for a person to look for a mortgage online is at lenders that will put it out for bids.. These lenders will take a mortgage application from almost anyone and will put it out for bid. In the bidding process several lenders will bid on it and offer rates and terms. The borrower will then pick the mortgage they want from the offers that get made.

The advantage to such sites is that the mortgages are put up for hundreds of lenders to look at. This means that all sorts of lenders including those willing to take a risk on bad credit may make a bid.

Federal programs for getting a mortgage with bad credit

There are also some federal programs designed to help new home buyers. The home buyers tax credit extends $8,000 for new home purchase regardless of credit score. The federal government is agreeing to pay for the first $8,000 in the cost of a new home for first time buyers. This should cover the down payment and closing costs and reduce the mortgage amount. The revised version of this legislation includes a $3,000 payment for persons who sell their old home and move to a new one.

Lenders will be more willing to work with homebuyers because they know that part of the costs have been underwritten by Uncle Sam. Realtors and mortgage lenders will be able to tell borrowers if they qualify for these programs.

These programs will be of big help for those with bad credit because they lessen the risks lenders take by loaning to such people. Lenders should be more willing to loan to buyers taking advantage of these programs.

Other possibilities for getting a mortgage with bad credit

Another possibility that people with bad credit should look into is the possibility of getting a seller to carry or underwrite the mortgage. The housing market is very bad right now and many people can’t sell their homes. Many of these homeowners maybe willing to carry a mortgage on home in order to get rid of these houses.

One more possibility to look into is banks and other lenders which have been stuck with lots of foreclosed homes. The lenders loose money while these homes sit empty so they want somebody to buy them. Many banks will give attractive financing or other deals to those who agree to take a foreclosure off their hands.

Many foreclosures sell at much lower prices so they are easier to buy. It is possible to locate foreclosures by asking realtors about them.

Bad credit should be no bar to getting a mortgage in today’s environment. Especially for those who can put a large down payment or use the large down payment that Uncle Sam is providing.