Home Mortgages For Bad Credit
We bought our first home three years ago but because our family owned business suddenly went downhill, we need to sell it off after living there for just 4 months. At that time before the mortgage crisis is fully uncovered, it was easy to qualify for a home loan with bad credit or no credit check. We managed to get a mortgage loan for $100,000 with monthly payments at $900 a month. While it was easy to get buy a home with no money down or no income, the interest rates are high and thats how the banks try to make money.
We managed to get jobs and have a stable income so we tried to get back into home ownership since paying $500 for rental is hurting our finances in the long term. This time we buy a cheap pre-owned home, in a nice up market district because we feel its safer for the kids. We had to try several times before we managed to get a mortgage loan loan with bad credit. Initially, we were rejected so it took another few months to fix outdated debt problems showing up in our credit report. the good thing is that 30 year mortgage rates are still quite low at 4.5%.
If you have to buy a house with poor credit, you have to accept higher mortgage rates at the moment since the more conservative banks such as Wells Fargo will only accept home buyers with minimum average credit rating. You can try to continue fixing your credit and try to refinance the first mortgage loan 6 to 12 months later.
For self employed and small business owners, it is highly recommended that you set up a limited liability corporation or LLC to separate your business credit from your personal credit. There is no point in dragging down your own credit in the event that you business fails and as sole proprietors, you will be affected in the process. You may find it hard to get personal loans or home loans due to a struggling business and debts.
No Money Down Home Loans For Bad Credit
While many people are considering FHA home mortgage for bad credit, we actually had a private mortgage lender though the interest is higher (10%). When you want to buy a house with no credit check and stated income, that is usually the only option to go.
If your finances are still unstable, especially for young couples who have just started work from college, you may want to delay the home purchase with no money down. You are likely to have no established credit yet and that makes it hard to get the cheapest home loan rates anyway. It is understandable many home buyers have valid concerns over rising home prices and mortgage rates since the economy is recovering. However, getting a 30 year mortgage loan for bad credit is a very big financial undertaking, possible the biggest money decision you need to make.
If you over stretch your income thinking that you will always have two paychecks coming next month, a sudden job loss can have very serious complication. You may still have student loans and other debts to be repaid on top of your mortgage. Any late payment or defaults will cause serious damage to your credit ratings and affect the cheap loan rates you are enjoying now. You will not want to end up losing your house, all the built up equity and having to go back to apartment rentals. Thus, thinking that you have bad credit and you need a no credit check home loan can be very dangerous to continue.
When you feel ready to get a home loan both in terms of the down payment and your credit ratings, shop around for the best rates. Getting a home loan with bad credit may not be the best option, so leave it unless you have no other choices. It is better to plan for a home purchase 6 months in advance so that you have time to fix credit problems and save up for the down payment. Despite all the advertisements claiming you can buy a house with no money down mortgage loan, it is expensive and not always available to all home buyers.