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Bad Credit Mortgage Loan Types
Author David Schneider | Dec 09,2007
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Having bad credit can make it difficult to get financing for a home. However, it doesn’t make it impossible. You can apply for several types bad credit mortgage loans.
Bad Credit Mortgage Loan Types -- Sub Prime No Doc Loans
The first type of bad credit mortgage that you can apply for is a sub prime no doc loan. This program is designed for people who have bad credit, but who have a large down payment. Generally, you will need to put down 20 percent of the home’s value in order to qualify for this loan program. The advantage of this program is that you don’t have to document your assets or your debts in order to qualify.
Bad Credit Mortgage Loan Types -- Sub Prime Loans No Down Payment
If you have bad credit and don’t have a lot of money to get into a home, then a sub prime no down payment loan program is right for you. These programs use a piggyback strategy to finance 100 percent of your home’s value. Generally, this will mean that you are given a first mortgage worth 80 percent of the home’s value and a second mortgage worth 20 percent of the home’s value. The drawbacks of this program are that you have two mortgage payments to make and you don’t have any initial equity in your home.
Do You Need A Bad Credit Mortgage?
Generally, if your FICO score is under 680, then you will need a sub prime mortgage. You may also need a bad credit mortgage if you have good credit, but an unconventional form of income that is hard to document. This includes people that work on commission or who are self-employed.
Having bad credit can make it difficult to get financing for a home. However, it doesn’t make it impossible. You can apply for several types bad credit mortgage loans.
Bad Credit Mortgage Loan Types -- Sub Prime No Doc Loans
The first type of bad credit mortgage that you can apply for is a sub prime no doc loan. This program is designed for people who have bad credit, but who have a large down payment. Generally, you will need to put down 20 percent of the home’s value in order to qualify for this loan program. The advantage of this program is that you don’t have to document your assets or your debts in order to qualify.
Bad Credit Mortgage Loan Types -- Sub Prime Loans No Down Payment
If you have bad credit and don’t have a lot of money to get into a home, then a sub prime no down payment loan program is right for you. These programs use a piggyback strategy to finance 100 percent of your home’s value. Generally, this will mean that you are given a first mortgage worth 80 percent of the home’s value and a second mortgage worth 20 percent of the home’s value. The drawbacks of this program are that you have two mortgage payments to make and you don’t have any initial equity in your home.
Do You Need A Bad Credit Mortgage?
Generally, if your FICO score is under 680, then you will need a sub prime mortgage. You may also need a bad credit mortgage if you have good credit, but an unconventional form of income that is hard to document. This includes people that work on commission or who are self-employed. |
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