Mortgages for People with Poor Credit

Mortgages for people with poor credit do exist, if you know where to look. There are many loan programs out there for people with poor credit scores, contrary to popular opinion. Now, with some of these loans, you are going to have to make some concessions, but there are a few loans that, if you qualify, are idea.

You won’t be able to qualify for a mortgage with poor credit from a bank or credit union. This is because these companies are very reluctant to lend money to high risk individuals. This means that if you want to get bad credit financing, you are going to have to seek other funding sources.

Now there are a few special loan programs you may qualify for.

FHA Home Loans

These are loans the government makes available for people who cannot qualify for a regular mortgage loan. FHA home loans are by far the most popular type of loan out there – and with good reason. There are some seriously compelling points to it. But you will need to meet the following requirements to qualify for this loan.

1. You need at least two years of steady income, preferably from the same employer. Lenders generally want to see at least two years of income and if your income had been steadily improving.

2. Your credit report must not have any more than two, thirty day late payments within a two year period. Ideally, you should have no late payments, but creditors are willing to overlook one or two such mistakes.

3. If you have declared bankruptcy in the past, you still can qualify for a FHA loan. You need to wait two years after bankruptcy discharge to apply for the FHA loan. If you have declared bankruptcy, you will even be more under the gun to have good credit. You will need to show perfect credit for two years. Some creditors want to see three years of perfect credit since you had bankruptcy discharge.

4. The last stipulation is that your new mortgage payments should not exceed more than 30% of your total gross income.

If you qualify for the above points, you stand a very good chance of qualifying for a FHA loan. The FHA, if you qualify, is one of the best mortgages for people with poor credit available. This should be your first choice. As stated, if you do have bad credit, you can still qualify, though it will be more difficult. You should look online to seek out FHA loan companies who offer this loan for easy application on their websites. At the very least, you should look to see what terms are offered by companies offering FHA loans.

 VA Home Loans

These are fantastic loans, but they are only limited to people who have served in the US military. What’s really nice about VA Home loans is that they don’t require down payments on a home and people with bad credit can still qualify for the loan. There is more information about these military loans online.

Bad Credit Mortgage Loans / Sub prime Mortgages

For people who don’t fit into the FHA loan or VA loan categories, then you may be relegated to seeking out sub prime lenders to secure bad credit mortgage financing.  Bad credit lenders will take a close look at your income to see if you can repay the loan. Sub Prim lenders are willing to lend money to people who cannot qualify for a home loan through traditional lenders such as banks or credit unions.

Now, while this is fantastic for those who have no other alternative to loan funding, there is a big catch. You will pay steep interest rates – much higher than normal. However, bad credit mortgages can be a great way to buy a house with poor credit while slowly improving your credit as you repay the loan.

Most people who get a sub prime mortgage look at the situation as temporary. After several years of squeaky clean credit, people who have a sub prime mortgage can try and refinance for a much better interest rate or seek out a bank and refinance their mortgage their – they stand a good chance of accomplishing this if they’ve spent two years improving their credit.

Now, you can find sub prime mortgage lenders online. When looking for a sub prime mortgage loan, you should check out as many sub prime lending company websites’ as possible and ask for sub prime mortgage quotes. This will help you get the best bad credit home loan possible, should you choose to apply for one. You will ensure you know the going rate for bad credit mortgage interest rates and won’t get ripped off.

It is very possible to find mortgages for people with poor credit, if you know what programs to look for. In general, you should make a consistent effort to improve your credit so that you can get any loan without hassle. But for those who need a mortgage now and can’t wait several years to improve your credit, you can look at FHA Home Loans, VA Home Loans, or a Sub Prime Bad Credit Loan as a way to fund buying a home with poor credit.