Persistence is the key working toward getting approved for a bad credit mortgage loan. There are many factors that you, as a borrower have control over that can help you get approved faster and easier. There are guidelines that most sub-prime lenders go by that, if you know them, can help you move through the process without getting stuck, unable to get financing.
If you have a bankruptcy or foreclosure, even if they are recent, do not despair. Many sub-prime or bad credit mortgage lenders have what’s called, guidelines for bankruptcy or foreclosure seasoning. That means that they have a set amount of time that must go by from the time of a bankruptcy or foreclosure before they will lend to a borrower.
Usually this time is 2-3 years, but many sub-prime lenders have no seasoning time, which means, if your credit score is above a certain point, you could get approved the day after your bankruptcy discharge. Other sub-prime lenders have bankruptcy or foreclosure seasoning of 6 months or a year. The biggest factor here will be your credit score.
Sub-prime or bad credit mortgage lenders will look closely at your credit score. In order to get 100% financing with bad credit, lenders will usually need to see you have a credit score of at least 600 or higher. There are quite a few things you can do to raise your credit score to be above this 600 mark. Here are a few suggestions:
1. Check your credit report for inaccuracies. Make sure all accounts included in bankruptcies and foreclosures are reporting accurately. If they show up as an open collection or unpaid account, charge-off or something else, this could be unnecessarily hurting your credit score. It will look like another, separate credit blemish instead of just the one. Make sure the bankruptcies and foreclosures are reporting accurately. Make sure accounts that are paid off, show up as being paid off, or accounts that are closed, show up as being closed.
2. Pay-off any small collection accounts or past due accounts that you can. Every account that you pay off will help boost your score. Once you have done this, get a letter of notification that the account is paid off and talk to your lender. Most lenders have programs where they can, for a $75 fee per item, provide proof to the credit bureaus that an account has been paid off and have your credit and credit score appropriately adjusted within a day or two. This program is sometimes called a “wrap it up” service. If you are in a hurry to get financed, this may be worth it to you.
3. Pay down open credit line balances. If you can even pay down the balances on any open lines of credit, this will boost your credit score. Your credit score is lowered when lines of credit are maxed out. You can make good use of your money by paying down credit card balances to boost your score.
Once you have used some of these techniques to boost your credit score, be persistent about contacting and applying with many different bad credit mortgage lenders. Many bad credit mortgage loan brokers claim that if they can’t do the loan, then no one can. That is simply not true. All mortgage loan brokers have connections with many different lenders and loan programs.
What may be impossible with one, can be very possible with another broker. If your score is around 600 or slightly higher, you will probably have a pre-payment penalty. Pretty much all bad credit mortgage loans will come with a pre-payment penalty.
Talk to your lender about the details of the pre-payment penalty. Find out how long the penalty will last and exactly how much money the penalty is. How much is the fine for pre-payment on the loan? This is an important factor to consider when comparing lenders.
To get a approved for a bad credit mortgage loan, be persistent, work on your credit score as much as you can to get it above that 600 mark and apply with or contact many lenders to compare mortgage loan programs.
Carrie Reeder is the owner of http://www.abcloanguide.com. ABC Loan Guide is an informational loan website with informative articles, the latest finance news and lists of recommended mortgage lenders.
Ways to consolidate your high interest school loans. The best loan consolidation strategies. Improve your bad credit history. Get great deals with the best lending institutions. Lower your monthly payments. Payoff & resolve your second home mortgage. Eliminate your personal debt. Get a low interest unsecured credit card. Borrow from your home equity. Special auto financing companys for your new or old car. Securing an online consolidated government student loan. How to avoid late payment charges & fees. Eliminate debt with an automatic bill payment plan with your local banker. Find the best alternative lending institutions. Rebuild your credit score with a secured creditcard from visa, mastercard, amex or discover cards. Get a bank interest rate quote on a revolving line of credit. Improve your poor credit rating with comsumer credit counseling services. Consumer information on reverse mortgages from the national center for home equity. Credit card dept consolodation - card credit relief . How to manage your money and educational debt. Consolidating your loans and credit card debt. Debt elimination, negotiation and management service. Mortgage refinancing and home refinance loans. Become debt-free and financially secure. Learn how to live debt free. Federal education loans for college students. How to get your credit card debt eliminated. Find the best mortgage brokers and lenders you can save time & money with. Free debt advice, no fees debt management plans. Manage and lower your debt costs. Great debt reduction strategies anyone can use. Learn how to negotiate reduced payments with your creditors without paying too much. Where to find the best financial analysts and personal financial advisors. How to reduce your monthly payments. How to get banks & finance companies to lend you money at the best possible rates. Ways of resolving collection actions. How to get your lender to see things your way. Combine your higher interest
rate credit cards on to a zero 0% interest rate card. Advice and help for people behind on their bills. Tips for consumers on safe banking over the Internet. How to negotiate a better deal on your home loan. Discount real estate housing broker online company. How to create a plan of action that eliminates all of your debt. Customers receive free quotes and the best deals from multiple lenders. Learn the procedures to resolve your billing discrepancies.
