What are Bad Credit Mortgages?
Before you look at any type of financing you need to make sure it’s right for you, and bad credit mortgages are no exception! Here we’re going to go over the benefits of these kinds of mortgages. Bad credit mortgages are great for people with bad credit, no credit, or just people who need to work on their credit. Just because you have bad credit doesn’t mean you can’t get a mortgage.
What is Bad Credit?
Bad credit can be a highly subjective term, but for most mortgage lenders it will be a FICO score under 600 points. If you have anything less than that you could have trouble getting a mortgage, even from bad credit mortgage lenders. You’ll want to first think about credit repair like debt consolidation; even if you do qualify for a bad credit mortgage you could wind up paying much more in interest where it doesn’t make sense to take the mortgage.
Is a Bad Credit Mortgage Right for You?
You’ll need to talk to a mortgage broker to make sure that this is the right kind of financing for you. There are many ways that a bad credit mortgage can go wrong; you’re going to want to be able to compare the interest rates from each mortgage, the terms, the reputation of the lenders. You’ll be able to make sure that you’re getting the most fair and equitable loan this way, regardless of what you need to mortgage for.
If you’re a first time home buyer and you need money for your down payment, a bad credit mortgage can help! If you’re trying to refinance your current home to purchase a big-ticket item, pay debts of send your children to university, these types of loans can help. You’re just going to need to be careful about how much of your equity you use as collateral.
Are Bad Credit Mortgages Hard to Get?
This really depends on your credit. If it’s teetering on the edge of the abyss, consider credit repair like debt consolidation. You will almost always be able to get this kind of mortgage regardless of your credit, but you’re going to want to improve your credit score as much as possible so you can avoid penalty interest points. These points can rack up thousands of dollars extra over the life of your mortgage. The purpose of a bad credit mortgage should be to get you on the road to somewhere better; if the mortgage offered will only keep you where you are or worse, don’t take it.
Guest Post By: Mike Smith blogs regularly and by profession is a mortgage broker. He works with Home Base Mortgage which is based in Toronto, Ontario, Canada. The company provides private mortgages, home mortgages, debt consolidation, mortgage refinancing, second mortgages and home equity loans.
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