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Design Your Dream House With A Bad Credit Home Loan

Author : Ask Bill

Finding a bad credit home loan can be a challenge, even in easy-credit markets. When there is a credit crunch or tight lending standards, finding a bad credit home loan becomes even more difficult. However, even if you have a less-than-average credit score or a bankruptcy on your record, you may be able to find a home loan that meets your needs. When looking for a bad credit home loan, it would be prudent to do your research so you can fully understand your options. You can review your credit report and consider improving your credit. Some simple tips to improve your credit score, which would help you in getting your "Mortgage bad credit rating" approved, are:
● To visit the website of your bank and you could dispute the incorrect entries (if any) in your account.
● To pay your current payments on time and without late penalty.
● To keep the number of credit enquiries down. This may help you to maintain a good credit score.
● To try and save a significant down payment for your home. Some lenders may be ready to approve you even for 100% financing, with low interest rate but they can demand for 5-6% down payment. So if you can save as much as possible for a down payment, it would be of help.
● To shop around for lenders and rates and consider working with a mortgage broker. You could go and shop around to approve your application. It is recommended that you apply to those online brokers who will forward your application to multiple lenders. Each broker works with its specific type of lenders. Some work with flexible lenders and others not. So you may have to search for the best option.
● Exploring government insured loans can be of help while searching for a bad credit home loan.

The number of individuals with a bad credit history seems to be growing at an ever increasing rate. This is no doubt partly caused by the gloomy economic climate that we live in. There are several ways that you can end up with having a less than perfect credit record. These include being late with payments on credit cards or loans, defaulting with your mortgage payments etc. If you are one of these individuals, then, not all may be lost as there are a number of companies offering poor credit loans tailored just for you. A quick Internet search would show you numerous loan companies offering loan packages for people with poor credit records. If you apply for a loan with any of these companies, they would in all probability base their judgment on your credit score. They would decide how much they want to lend you and at what rate of interest. The fly in the ointment would be the rate of interest they would charge you. It would probably be somewhat higher than if they were lending money to an individual with a good credit record.
Using a credit line to borrow against the equity in your home has become a popular source of consumer credit. Lenders are offering these home equity credit lines in a variety of ways. You will find most loans come with variable interest rates, some come with attractive low introductory rates, and a few come with fixed rates. You may also find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. You can find loans with large balloon payments at the end of the loan, and others with no balloons but with higher monthly payments. At the same time, home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. Those loans with a large final (balloon) payment may lead you to borrow more money to pay off this debt, or they may put your home in jeopardy if you cannot qualify for refinancing. And, if you sell your home, most plans require you to pay off your credit line at that time. In addition, because home equity loans give you relatively easy access to cash, you might find you borrow money more freely.

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Tags:   bad credit home loan, poor credit loans, home equity credit

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Submitted : 2010-10-13    Word Count : 715    Times Viewed: 332