Mortgage Loans for Weak Credit

Biphoo

3 Jun 2017

172 Views

Mortgage Loans for Weak Credit: Know Your Options Direct Mortgage Loans

It is a common belief that owning a home is something that only well-off people can do. This is partly true, considering how much it costs to purchase a property. If you think along these lines, then you must also wonder how come there are a number of middle class and average salaried individuals who can have their own homes as well. Buying a house is no easy task, nor it is an impossible one for an ordinary individual. That is why mortgage loans exist. Even though you may have had a hard time trying to improve your credit score, you may still take advantage of mortgage loans even with weak credit.

Mortgage Programs for People with Bad CreditFederal Housing Administration (FDA)

The Federal Housing Administration has successfully made it easier for people to have access to Best home loans. No matter how the economy goes or how bad the real estate market has gone, you can count on the FDA to offer consumers a variety of ways to own a house. As a matter of fact, requirements for the FDA-insured mortgage loans have become less complicated, thus making 30 year fixed rate mortgages available to consumers. Having a bad credit should usually not prevent borrowers from qualifying for this mortgage program. Even those with a credit score of 580 may still qualify for the loan. If you have a credit score of 580 to 620, a 10 percent down payment will be required. Meanwhile, those with a better and higher credit score are only required to present a down payment of 3.5 percent. In short, you do not have to have a lot of cash to use a mortgage loan with the FHA program. As long as you can prove that you have a job that offers a stable income, you have nothing to worry about.

Adjustable Rate Mortgage (ARM)

If you are looking for mortgage loans for weak credit another option is to get an interest-only mortgage. In comparison to a fixed rate mortgage, this type of home loan requires a Low-Interest Rates Home Loans rate after some time. In addition, the down payment you may be asked for is higher as well. You have to be careful in choosing a mortgage loan because some may not have unfavorable terms and this could lead to you not qualifying to refinance.

Hard Money Lenders

Banks and other traditional lending companies are too conservative to accept mortgage loan applications for people with bad credit. There are however some lenders who are willing to take the risk. This is because they make borrowers compensate for their low credit score by requiring them to pledge a huge down payment. In most cases, this type of mortgage loan is used by businesspeople who invest in properties they need to sell immediately. Nevertheless, this is an option you can consider if you are looking for mortgage loans for weak credit. Just remember that you need an enough amount of money for a down payment and that the interest you are going to pay will be much higher than that for other mortgage loans.

Biphoo

3 Jun 2017

172 Views