Bad credit home loans are programs designed for people with credit problems. As with any program, there are limitations on how bad they will actually allow or offer loans.
Certain mortgage lenders who have chosen to offer a lower credit score or damaged credit loan program. These programs are outside of the normal loan guidelines or “Conforming Loans” and offer flexibility with lower minimum credit scores and minimum credit tradelines that apply to most FHA and conventional loans. Help for Home Buyers offers both a variety of lower score program but also a credit repair and Improvement program to help you improve your credit. The lower credit score programs typically have a higher interest rate and additional fees, but provide a way to get in a home now. Keep in mind, that there is always a give and take when it comes to lower credit score programs. These bad credit home loan lenders are flexible with scores, but want to have a strong rental history as a compensating factor. At the same time, these bad credit home loan lenders may also want to have some additional savings in the bank after you purchase your home, called “Reserves”. They may also require a very stable income and employment history as a compensating factor. They will sometimes also want “Alternative Credit” to further strengthen their profile of you, the borrower. In many cases, we have seem these types of lenders ask for two years of verifiable rental history with no late payments, along with payment history of utilities for the home. If there is a strong housing related history for rent and other expenses, then that gets the process started in the right direction.
So, you need to check with the bad credit home loan program for these additional requirements or conditions for an approval. At the same time, they may limit the amount of home that you purchase, as a way to provide some “Reserves” each month from your income. So, if your scores were good enough to qualify for let’s say, $200,000, then a bad credit home loan lender may put a maximum of what you can buy at $140,000 or $150,000. So, then you have to ask yourself if you can find a home for that price, and if it will satisfy your needs and wants. If you don’t have the time or the desire to go through the credit repair and improvement process then a bad credit home loan may be a good option for you.
In order to qualify for a lower credit score home mortgage, the best mortgage lenders for bad credit are going to vary depending on the situation with the credit. Each bad credit home loan lender has set their own rules and will choose what they will and what they won’t accept for credit blemishes and credit scores. So just because it’s a bad credit home loan doesn’t necessarily mean that they will accept all credit types. They will still look at your overall credit to make sure that you meet their guidelines especially when it comes to your current credit. Almost all these plans have one thing in common, they offer flexibility for older credit blemishes and previous derogatory credit. Any negative credit within the last 12 months is still typically not acceptable. So in other words, if you had some credit issues in the past you must also have a good reason why the credit issues happened.
Many situations in life can cause people to fall behind on their payments and their credit accounts, but the bad credit home loan lenders want to see that that situation is over and not a recurring problem. A loss of a job or lay off may happen, but having a consistent choppy employment history will show a pattern, and future employment issues.
Even if it’s only with very minimal credit that they want to see that you made an effort over the last 12 months to get your credit back on track again so any late payments or any new collections within the last 12 months are typically unacceptable and will result in a loan denial.
Many of these bad credit Home Loans are designed to be a temporary mortgage loan while you are re-establishing your credit or having your credit cleaned up or repaired. Because of the increased risk that the bad credit mortgage lenders accept, there are more fees which make the loans much more expensive. The interest rates are typically higher and therefore a higher monthly payment. Overall it could end up being a more expensive loan. So expect for your mortgage payment to be a little bit higher than a normal home loan. Also expect for your closing costs and fees to be more expensive and typically have a surcharge because of the credit risk. These loans serve a purpose and help a lot of families achieve the dream of homeownership, but they do have a downside.
Help for Home Buyers offers a variety of bad credit mortgage loans and bad credit mortgage lender programs to help families stop renting and have their monthly housing expense go to a home mortgage versus paying a landlord’s rent.
So, Help For Home Buyers provides another option to a bad credit home loan, and that is a “Credit Repair Program for Home Buyers”. Help For Home Buyers has been fixing & improving credit for home buyers for almost 24 years now. Unlike a traditional credit repair program, Help For Home Buyers’ program is very focused on getting a client ready in the shortest amount of time, which is typically half to one quarter the time it takes a normal credit repair program. Almost all “Credit Repair” programs will make small incremental improvements in order to justify charging a monthly fee for as long as they can. However, after speaking with many clients that had their credit prior to using our service, a consistent comment was that their scores would swing up and then back down again. There is no way we could comfortably be looking for a home, with your scores going up and down. This is not a safe situation, but could also mean that your mortgage approval will constantly change as your scores change. Our program prides itself in being faster but also more permanent that other programs. We need to make sure your credit is stable, and that your scores stay the same until closing. Since the monthly payments is a credit repair program’s only revenue stream, they will drag it on as long as they can. So, results will take a long time and may never really come, because the traditional “Credit Repair” companies have no incentive or additional revenue that they are making by helping you achieve a mortgage or home loan approval.
That is where the Help For Home Buyers program differs in both effectiveness and time. Our home counselors make their revenue when they get you approved and into a home, so the difference is night and day. Our home counselors want to get you into a home the moment you walk into our door, and they will do everything to make sure your Credit Recovery is fast and permanent.
So either way we can help, by finding you the best bad credit home loan that is available or helping you prepare your credit and qualification for the best home loan available. Click here to get started. Bad Credit Home Loans How to Apply
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We Offer Assistance with Every Part and Step of Buying a Own. From having over 30 lender partners with several hundred combined Home Buyer Programs . We also Assist with Damaged Credit with Our Credit Repair & Improvement Program, so Credit Score Doesn’t Matter With Us. And, finally finding the best Realtor for Your Home Search.