Getting a Mortgage When You Have Bad Credit
Monday, April 4th, 2011Getting a mortgage loan with bad credit isn’t as hard as it used to be. Granted it isn’t as easy as it was in the boom when anyone could get a mortgage but it still isn’t hard as it was 20 years ago. We are listing some tips on getting the best mortgage rates today for either buying a home or if you are thinking about refinancing your mortgage. These tips are specially for people with bad credit.
For buyers, if you find a home that costs less than the appraisal prices you might have an easier time getting a mortgage with lower rates on current mortgage interest rates. Why? Because there is equity in the home and the equity will automatically lower your loan-to-value LTV ratio and with refinance rates where they are today you might be able to qualify for more each month.
Say if you put a 20 percent downpayment and the home appraies for 10 percent more than the purchase price, you’re LTV ratio would go down to 70%. Mortgagelendingrates might make it worth while to put less than 20% down. With an LTV ratio like that you probably will also get a better mortgage rate. This also applies to refinancing. If you have a lot of equity in your home you will probably be able to get a refinance done with a lower refinance rate.
If you’re buying the home see if the person who is selling the home with carry a mortgage. Granted the mortgage rate you pay the seller might be higher or in fact might even be lower than the prevailing mortgage rates right now.
If your refinancing ask a family member if they would pay a personal loan to you, if you pay down the mortgage when you refinance you probably will get a better refinance rate deal.
Again, for buyers if you have a low credit score or even declared bankruptcy recently if you put a large downpayment on the home you will have a greater change getting a home loan. If you put very little down your mortgage rate will be higher. You might also qualify for a first home buyer mortgage that will let you put as little as 3 percent down.
Buyers, shop around for the lowest mortgage rate and if you want to refinance shop around for the best refinance rate. You can do so easily today just by searching online.
You can also work on improving your credit score while you save money to buy a home. If you’re doing a refi, you can also wait until you get your credit score higher before applying for a refinance loan.