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Bad credit doesn’t have to dampen your dreams of purchasing a home. With a little bit of investigative work on your part, you can find relatively low rates. You can also improve your home loan application with a few tricks. Don’t forget that you can improve your credit rating in as little as two years and qualify for a low rate refinance package. These three things will ensure that you get your home at a reasonable price.

1. You Don’t Have To Pay High Rates

A common misperception is that if you have bad credit, you will pay dearly for a home loan. Even with a poor credit record, you can find sub prime loans only two or three points higher than conventional loans.

Another misperception is that a bankruptcy or late payment means you have bad credit for seven to ten years. Not true. While such information will be on your record for several years, you can still have a good credit rating.

The best way to determine your credit record is to get a free copy of your credit report from the consumer credit agencies. You can also purchase your credit score info, or get it free from a credit monitoring service. With your credit report, you should also check for any errors and get them fixed.

2. You Can Improve Your Application

Your credit score isn’t the only thing that affects your mortgage application. Your employment history, assets, and cash reserves are also important.

Having six months of cash reserves, such as savings, CODs, or money market accounts, can also qualify you for better rates. Down payments will also affect your rates. The larger the down payment, the better the rates.

Picking an adjustable rate mortgage is also easier to qualify for since monthly payments are relatively low with this type of financing. Just be prepared for larger monthly payments if market rates rise.

3. You Can Have Good Credit In Two Years

Once you have signed for your mortgage, remember that you can refinance in two year for better rates. During that time you can improve your credit score by making regular monthly payments and paying off short term debt.

Before signing for any mortgage, first check the rates of several lenders. A little comparison shopping now can save you thousands of dollars in the future.

Here are our recommended subprime mortgage lenders,
Recommended
Bad Credit Mortgage Lenders.

Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.

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If you have filed bankruptcy recently, you may wonder if you can get approved for a home loan. You may also wonder if buying a home after a recent bankruptcy is a good idea for you.

While a bankruptcy can make getting approved for a mortgage loan more difficult, it is still possible to get approved for a mortgage loan. In fact, there are more and more bad credit loan programs coming out all the time. Subprime lenders are focusing more on helping individuals with poor credit acheive home ownership. This is happening mostly because bankruptcies are still on the rise and there is an increasing number of people with bad credit who are looking for home financing.

Here are some reasons to consider home ownership after a bankruptcy:

1. Increase Your Credit Score - When you make your payments regularly, you improve your credit rating. Once your pre-payment penalty period is over, you should be able to refinance your mortgage loan for a much lower interest rate. After your bankruptcy has been discharged for over 2-3 years, you should have a much easier time qualifying for a lower interest rate mortgage loan.

2. Accrue Equity In Your Home - If you are just making rent payments, you are throwing your monthly payments away. When you own a home, over time, home values increase and you are working toward owning an asset.

3. Take Out An Equity Loan To Consolidate Debt or Get Needed Extra Cash - Once you have bought your house, as soon as 6 months or so later, you might be able to take out an equity loan on your home and consolidate any other debt that you might have since your bankruptcy or debt that could not be included in your bankruptcy. Taxes and student loans will not be discharged in a bankruptcy. You may also want to use the extra cash to invest in a business venture or for needed home improvement.

To view our list of recommended lenders online for bad credit mortgage loans,
visit this page:
Recommended
Poor Credit Mortgage Lenders Online.

Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.

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