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How Do I Determine If I Need a Bad Credit Mortgage
Author David Schneider | May 23,2007
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Frank had just gotten a divorce and he was trying to put the pieces of his life together. He was currently renting, but he knew that he wanted to buy his own home as soon as possible. He had a sizable amount of money available for a down payment and he had a good middle-income job. As Frank approached the end of his lease he decided that he would go ahead and buy a home, but he didn't know if being a new divorcee would hurt his credit. Frank talked to a lender about his credit worthiness for a traditional loan and found out that the divorce may have slightly lowered his credit rating. However, he had high marks in other areas of his credit history so he would be able to qualify for a traditional prime rate mortgage. If you want to learn how to determine if you need a bad credit mortgage then all you have to do is to follow these easy steps.
Step 1: Request Your Credit Report and FICO Score
The first step to understanding your credit is to review your credit report and FICO score. Your FICO score is what lenders look at to determine your credit rating and credit risk. To qualify for a prime rate mortgage you generally need a FICO score of at least 680. If you think that your FICO score is too low, then you will need to review your credit report for errors, high credit card debt and negative remarks about your payment history. New credit accounts and too many credit inquiries can also hurt your FICO score so you will want to avoid applying for any new credit accounts six months before you apply for a mortgage.
Step 2: Evaluate Your Legal Position
Certain legal actions initiated by you or against you can hurt your credit and disqualify you for traditional mortgages. If you have filed for a bankruptcy in the last seven years, then you will most likely need to apply for a bad credit mortgage. A divorce on your credit report shouldn't hurt your credit rating as long as you continued to make on time payments for your credit accounts.
Step 3: Evaluate Your Income and Your Reason for the Loan
Bad credit mortgages, or subprime mortgages, are not exclusively for people who have less than perfect credit. They are also a good option for people who have hard to document income. People who are self-employed often cannot get a traditional mortgage, so they need to rely on bad credit mortgage programs to finance their home purchases. People with borderline credit who are looking to buy an investment property may also need to rely on a bad credit mortgage to finance their purchase.
QuoteMatch.com Can Help You Find a Lender
If you need a bad credit mortgage or a prime rate mortgage QuoteMatch.com can help you. They work with dozens of high-quality lenders that want to help you get into the home of your dreams. Don't waste your money on rent one more month. Go to QuoteMatch.com today to get your free, no-obligation mortgage quotes. |
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