Mortgage - Home Mortgage

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Bad Credit Home Mortgage Lender

It is possible for those with bad credit to get a home mortgage. The best for a person who has a poor credit score to get a mortgage is to locate a bad credit home mortgage lender.

There are many lenders who specialize in working with people who have bad credit. These lenders are willing to work with people with low credit scores because many individuals with “bad credit” have money.

Having bad credit simply means that a person has a low credit score usually because of missed payments or old debts. An individual with bad credit can have enough money to pay a mortgage off. Those with bad credit should be able to get a mortgage by working with lenders who specialize in bad credit loans.

How to find bad credit home mortgage lenders

Typing the words bad credit and home mortgage into a search engine should produce a list of lenders. These lenders specialize in helping people with bad credit get mortgages.

One advantage to working with such lenders is that they can provide a fairly quick decision on a mortgage. Such lenders should also be able to tell a person what they need to do to qualify for a mortgage.

In many cases, lenders will work with individuals who can demonstrate that they have a reliable source of income such as a good job. Bad credit lenders will also be more likely to work with those who are willing to come with a large down payment.

What you’ll need to qualify for a bad credit mortgage

The main thing that people will need to qualify for a mortgage if they have bad credit is a verifiable source of income. This can be a job, a pension, a government payment such as Social Security or an annuity. An individual who has a lot of money in savings or investments might be able to waive the income requirements.

The bad credit lender will need proof of the income in the form of pay stubs or bank records. They may also ask for other verification such as a letter from an employer.

Bad credit lenders may also require borrowers to have a much larger down payment. Making a larger down payment can convince a lender to overlook a history of bad credit.

Drawbacks to mortgage loans with bad credit

The main drawback to mortgage loans with bad credit is usually higher interest rates. Since the lender is taking more of a risk by loaning money to a person with bad credit they’ll want a higher return. This usually means that they’ll charge a higher interest rate on a mortgage to that individual.

Another drawback could be stricter terms; for example, the lender may require the borrower to take out an adjustable rate mortgage or ARM. In an ARM the lender can raise or lower the interest rate, in a traditional mortgage the interest rate is locked in. The lender may also require the borrower to get a cosigner on the mortgage or have the seller of the property carry the mortgage.