Darin Sewell asked:




Bad credit mortgage refinancing loans help borrowers with credit problems refinance an existing mortgage to either payoff debt or get cash out. If your credit is poor because of excessive credit card debt then bad credit refinancing is one of the best ways to improve your credit score.

Bad credit refinancing is typically for home owners who have credit scores under 620 and have late mortgage payment’s in the last 12 months. Sub prime lenders are the main source for these types of loans and many will lend to bad credit borrowers with a 30, 60 and even a 90 day late payment on record. Although the amount of equity you can borrow will be greatly reduced with the amount of late payments you have. Qualifying Credit scores for sub prime loans begin at 500 and go all the way up to 700, at a 500 credit score expect to be able to borrow 70-80% of your home appraised value. The higher your credit score the higher the Loan To Value you can borrow.

Many sub prime lenders offer 2 or 3 year Adjustable Rate Mortgages to bad credit borrowers, short term Adjustable mortgages are not a good idea for the bad credit borrower. The biggest drawback to an ARM is that if you should fail to improve you credit score and be unable to refinance, your payments will begin to rise when your adjustment period begins. The rise in payments can often be hundreds of dollars a month making your mortgage difficult to pay. When applying for a bad credit home loan It is best to stick with a fixed rate subprime mortgage, if you need a lower payment ask your mortgage broker about 40 year fixed rate subprime loans.

With the availability of subprime home loans bad credit refinancing can be a great way to improve your credit score, however when the wrong programs are chosen it can do just the opposite. Use a good reputable mortgage broker and always use common sense when shopping for your subprime home loan.

Learn More About Bad Credit Home loans

Jeff

Carrie Reeder asked:




After a bankruptcy, you can get approved for a home loan. Just be
prepared to pay several points above conventional rates. However, if you
have a large down payment or wait two years, your mortgage rates will
improve to near conventional rates.

Dealing With A Past Bankruptcy On Your Credit Report

A bankruptcy will stay on your credit report for seven to ten years.
However, it stops affecting your credit significantly after two years. So
if you have established other good credit habits, you can qualify for
market rates in no time.

But before you shrug off your bankruptcy, check your credit report to
be sure that all accounts that were part of your bankruptcy are
discharged. It’s not uncommon for paperwork to not get processed, leaving a
negative mark on your report.

Other Helpful Factors

A down payment of 20% is expected for conventional rates with a
traditional loan. Anything less and you will have to either pay a point or
more at closing or additional loan interest. The same is true with sub
prime loans. However, larger down payments decrease your rates.

Significant cash reserves and a large income can also offset your
credit risk. The amount you want to borrow is also a factor. The lower your
debt to income ratio, the better score you will get.

It’s also important to remember that not all lenders will treat your
application the same. So it’s important to shop around for the right
mortgage with the right terms.

Shopping Mortgage Lenders

If it has been less than two years after your bankruptcy or you know
you have poor credit, start shopping with a sub prime lender. They deal
primarily with people who have adverse credit. They can also offer you a
lot more options than a traditional lender.

For instance, sub prime lenders have easier terms to qualify for a zero
down mortgage. You can also opt for a future refinance with your
mortgage when your credit score improves.

Remember that you have many financing options for a mortgage, even with
a bankruptcy in your past.

Judy