Buying a home with bad credit - Tips on finding the right broker or lender.
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You can
buy a home with a bad credit record; you just need to find the right
mortgage financing package. Before you sign up with the first company
that offers you a loan, remember to research offers to be assured you
are getting a fair deal.
Know Your Credit Rating
Your credit score is one of the biggest factors in determining the points
you will pay for your loan. People with scores between 620 and 800 have
near perfect credit and will have the lowest rates and fees. Scores
between 620 and 550 mean an interest rate or two higher. 600 is usually
the cutoff point for 100% financing. Scores less than 550 mean mortgage
interest rates are up to 5% higher with up to five points. Lenders will
also require a down payment between 5% and 20%
You can find your score online along with your credit report.
This is a good time to make sure all the information is correct on your
record. Any discrepancies should be checked out and corrected before
applying for a loan.
Know The Fees
Arm yourself with information so you will know what are reasonable fees
for your type of loan. Mortgage brokers are paid for their work through
points paid up front or through the lifetime of the loan by the lender.
Lenders also make money through points.
It is reasonable to expect to pay up to five points for a mortgage loan,
but any higher and you should be wary. There are always exceptions to
this, so use your best judgment and compare companies.
Get Multiple Offers
Mortgage lenders can vary as much as 5% in their interest rates, so
you should compare financing packages. The internet has made comparison
shopping easy. You can get bids from multiple lenders and read over
their offers from the comfort of your home.
Read The Fine Print
Once you get an offer from a mortgage lender, make sure you read the
fine print. Interest rates are easy to compare, but you should also
look over the fees that are involved which can add up to thousands of
dollars. Also, be sure to understand any fees for late or missed payments.
About The Author: To see a list of recommended bad credit mortgage loan
companies online, visit this page:
www.abcloanguide.com/lessthanperfectcredit.shtml
- Carrie Reeder is the owner of ABC Loan Guide. It is an informational
loan website, with informative articles and the latest finance news.
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