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Bad Credit Loans Are Available
By Glenn Reschke
Finding home mortgage are a reality for people with bad credit. Bad credit mortgage are offered by sub prime lenders. Hard money and bad credit mortgage are reserved for borrowers with poor to bad credit. There are basically two types of in the context of traditional home buying: A-paper and subprime loans. A-paper go to those who have good credit -- as defined by the lender in question.
What is an A-paper loan for one lender may be a good loan risk but not worthy of A-paper. For example, with one lender a 660 middle FICO score qualifies as an A-paper loan. However, with another lender, the 700 middle FICO score is the cut off point. The point here is that each lender is different. Nevertheless, there are general guidelines for major lenders when it comes to the grading of a client's credit score.
The subprime loan is for those who have bad or average credit. There are shades of gray here, however. In truth, bad credit mortgage are specifically designed mortgage for people afflicting from a bad credit history. While rates may be higher than those with solid credit histories, bad credit mortgage are still available at historically low rates. They're available, believe me. There are numerous companies that cater exclusively to this clientele. Even major lenders like Wells Fargo, Chase Manhattan, and others have established subprime division to have options for those customers who don't have good credit.
To be clear, subprime mortgage are offered to individuals with low credit scores. Even interest only home loans subprime California are available. (Interest-only home -- even subprime are also available -- but I don’t recommend them as the principal doesn’t get paid on such loans. Only the interest gets paid, hence the term "interest only home loans".)
As mentioned, prime mortgage are offered to individuals with excellent credit. A good strategy commonly employed is for someone with bad credit to use bad-credit mortgage to repair your credit score.
Once their credit is rebuilt, they can then refinance for a better loan -- an A-paper loan. The most common sources for mortgage are banks, credit unions, and mortgage companies.
It goes without saying that mortgage are one of the biggest forms of debt that most people incur during their lifetime. Second, all home mortgage are based on two things: Risk and viability. Bad credit home are a risk to a lender. The better the credit, the less the risk -- that's why subprime have a higher interest rate. Nevertheless, reasonable rate bad credit mortgage are available.
Here are some basic tips I recommend to help you get a good subprime loan to rebuild your credit.. Be sure to get information about mortgages from several lenders or brokers. Insider information about how to get the best mortgage. When I was a loan agent, I was often asked, "Does credit report counseling affect my credit report." No, but debt consolidation does. If a lender sees debt consolidation on your credit report, some lenders consider that as bad as a bankruptcy. So, if you can avoid that. The best advice I can give you to rebuild your credit so you can become worthy of an A-paper loan is this: Pay every bill on time, especially your new subprime mortgage loan. It doesn't have to take long. I turned a 538 credit score to 722 in only a year and a half.
In conclusion, make sure you get an affordable home loan with good or bad credit. You can do this online with numerous vendors. If you need help getting a home mortgage, these credit tips and general subprime loan information will help you in getting a better deal or to at least guide you in the right direction. Clearly, there is no denying that subprime mortgage are primarily offered to individuals with low credit scores. In addition, hard money and bad credit mortgage are reserved for borrowers with poor to bad credit. Just remember, though, there are bad credit mortgage (and companies) that exist to provide mortgage for people afflicting from a bad credit history. The basics of mortgage are pretty easy to understand with credit being perhaps the most important.
Glenn Reschke is a former loan agent. He has a bachelor"s degree in English, a master"s degree in Organizational Management. For more information on getting the best deal on your home loan, visit his site at www.homeloanlendinginfo.com
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