Bad Credit Mortgage
Are you a good candidate for a bad credit home mortgage?
If you are or were saddled with debt that has adversely affected your credit rating, it is not impossible for you to get a mortgage. While your options may be severely limited if you're dealing only with conventional lenders, there are financial institutions out there that will offer you a bad credit home mortgage, allowing you to enjoy the benefits of home ownership before your credit is fully repaired.
What Is a Bad Credit Mortgage?
A bad credit mortgage is functionally identical to a normal variable or fixed rate mortgage, in that you make a down payment on the house you want to buy and then have a mortgage broker finance the balance of the sale amount.
However, when you get a mortgage with bad credit, you'll be subject to additional terms and conditions designed to reduce the lender's amount of risk. The lender will usually include conditions allowing them to foreclose more quickly if you default, and the interest rates on a bad credit mortgage are usually higher. It's a financial principle that lenders will increase interest rates when they face higher risks; it's a fail-safe measure they use to protect the investment they're making in you.
Bad credit mortgage refinancing is usually subject to higher fees as well. This is because you're seen as a greater risk if you need to seek mortgage refinancing on a loan you got with less-than-optimal credit in the first place.
Advantages of Getting a Bad Credit Mortgage Loan
Before you apply for a bad credit mortgage, you should do whatever you can to improve your credit rating. The terms and conditions attached to a bad credit mortgage loan are directly tied to your credit score; the better your score, the more advantageous your terms will be.
Properly handled, though, a bad credit home mortgage can help repair your bad credit. Depending on the lender you work with, you may also have the opportunity to escape some of your high-interest debt by consolidating your outstanding debts into a single monthly payment. This brings bad credit relief because your creditors will be paid off more quickly.
If you're facing bankruptcy, a bad credit mortgage can also save you. The leverage you'll get with a bad credit mortgage loan will help you avoid falling to financial rock bottom.
Bad credit mortgages are generally available through specialized lenders who understand that responsible people sometimes get into credit trouble. Connect with one today to realize your dreams of home ownership.