Resolve Bad Credit Mortgage Loan Issue
Are you haunted by a low credit score? Is a bad credit mortgage loan all you qualify for? A bad credit rating can cost you. It can result in denied loans or a substantial increase in the interest rates and insurance premiums that you pay, and even affect job applications. In general, a bad credit score mortgage entails a high rate of interest. When reviewing your application, lenders look at the amount of debt you carry, your ability to repay it and your payment history. The rule of thumb is simple: the more debt you have, the higher risk category you are assigned. If you have a history of making late payments, or more serious problems such as a court judgment against you or a personal bankruptcy, a lender may consider you to have a very high risk of default and may choose not to lend you money, or only qualify you for a bad credit mortgage loan.
Credit Score and Home Loan: Exploring the Nexus
While securing a mortgage loan is not impossible when you have a bad credit score, it is bound to attract an above average rate of interest. FHA loans, for example, are a good option for low-credit-score mortgage borrowers, but their total rate of interest and fee is higher than conventional loans. Moreover, if your unpaid collection account balances exceed $1000, the Federal Housing Administration may even disapprove your home loan application.
Borrowers with credit scores in the range of 700, usually, take the benefit of low interest rates. However, as soon as your score touches the 600 or below benchmark, things become a little dicey, inhibiting your chances to find a lender for your mortgage loan. The only way forward is to improve your credit score ratings, besides paying your bills on time. It is also imperative to get rid of plain erroneous items that, in many cases, may stay up to 10 years on your credit report.
Don’t Pay More than You Should
Many bad credit mortgage loan lenders will accept higher-risk clients, albeit at a cost. A bad credit mortgage loan, or sub-prime loan, is designed for people with bad credit. These have higher interest rates and often there is a higher penalty to repay the bad credit mortgage loan early. Bad credit mortgage loan borrowers with bad credit ratings need to beware of predatory lenders who charge exorbitant rates and fees.
Avoid a bad credit mortgage loan, or get better terms on a bad credit mortgage loan, by taking the time to improve your credit rating. Under the Fair Credit Reporting Act, you can dispute information in your credit files with the three credit repositories, and the creditor is required by law to verify the disputed information. That which can’t be verified within 30 to 45 days must be removed. While credit repair can be a do-it-yourself project, it is time consuming and tedious.
How to Repair a Bad Credit Score?
The road to your dream home may accompany a lot of bumps and pits if you have a bad credit score. Ask why, your mortgage application’s approval does not end with the signing of documents and a pre-set down payment. The process is much more complex, as your lenders check your credit report’s age, account balances and payment history beforehand. While a good credit score establishes you as a low-risk investment in their eyes, a low credit score widens the gap between you and your dream house.
To resolve such bad credit mortgage loan issues, Repair My Credit Now helps you identify any and all potential errors dropping your credit score. Following a multi-layered process, our industry experts analyze every petty and major detail to ensure no derogatory remarks or errors stop creditors from approving your mortgage loan or setting a low interest rate on your mortgage.
Repair My Credit Now enforces the Federal and State laws that protect consumers from unverifiable credit reporting through its superlative strategies. Our in-house credit veterans use a multiple phase audit process to remove inaccurate items from your credit report and help you regain that score necessary for securing a mortgage loan at the lowest possible interest rates at favorable terms.
Things to Remember
- Keep a track of your credit score
- Pay your bills on time
- Avoid maxing your credit cards
- Check your payment history, without fail
- Report credit errors as soon as possible
Let Us Restore Your Credit
The road to your dream house is much easier with an excellent credit score, and you have every right to it. That said, if you are unsure of the reasons lowering your credit score and need to apply for a mortgage loan, better let a professional help you. To talk to one of our representatives call us at 972-529-0900 or 888- 4-MY-REPAIR (toll free).
Some other links you might be interested in:
- Bad credit mortgage issues – What happens when you apply for a mortgage and you have poor credit?
- Mortgage Terminology – Here is a list of the most common terms and phrases in the mortgage industry.
- How to improve your credit – Start by getting some professional help.