Jan
1
Poor Credit Loans
Filed Under mortgage
Poor credit loans are loans where the borrower has had some problems with their credit and cant qualify for a conforming loan.
To offset the poor credit lenders require a higher interest rate than on a conforming loans.
There are loan programs available specifically for borrowers with poor credit, but there are often extreme limitations that may keep the borrower from being able to qualify. For example, with a 475 fico score, you may be able to qualify for a loan, but only for 70% of the value of the home. This would mean that you would have to come up with a 30% down payment if you are purchasing the home. For most borrowers, this would prevent them from being able to buy the home.
Poor Credit Loans are available to consumers that fit into a fico score bracket starting as low as 475. Lenders view mortgage history and consumer credit as a part of the approval process for most poor credit loan situations. LTV or (Loan to Value) is also a factor in the approval process of a poor credit loan. Lending institutions limit the LTV to a 70% qualifying percentage, your appraised value or equity position in your home determines the LTV. Good mortgage history, consumer credit, and LTV are the 3 keys in the loan process which will help you qualify for a refinance or purchase of home.
Lenders charge more points and higher interest rates to those with poor credit. Loans to borrowers with poor credit carry far more risk and lenders deserve compensation for this risk. Borrowers with good credit should not let themselves enter into a loan agreement where they pay points and rates based on a bad credit loan. One national company recently filed bankruptcy to protect themselves from litigation on fraudulent loan practices.
Lenders make a clear distinction between Poor Credit profile and No Credit profile. No Credit merely means the borrower has not had a history of using credit. A person with Poor Credit/Bad Credit profile has demonstrated a pattern of mishandling credit.
Is your rate too high? If you're looking to compare mortgage rates or to get a rate quote on a FHA loan start hereFile this under: lending, mortgage, purchase, rate, refinance, va
Related posts
RELATED SEARCHES:
poor credit lenders, poor credit loans, poor credit loan, loans poor credit, bad credit loan
RELATED TAGS:
poor credit lenders, poor credit loans, poor credit loan, loans poor credit, bad credit loan
Comments
Leave a Reply