Buying a Home With Bad Credit -
Tips on Finding the Right Br |
By Carrie Reeder |
|
You can buy a home with a bad credit record; you just need to find
the right mortgage financing package. Before you sign up with
the first company that offers you a loan, remember to research
offers to be assured you are getting a fair deal.
Know
Your Credit Rating
Your credit score is one of the
biggest factors in determining the points you will pay for your
loan. People with scores between 620 and 800 have near perfect
credit and will have the lowest rates and fees. Scores between
620 and 550 mean an interest rate or two higher. 600 is usually
the cutoff point for 100% financing. Scores less than 550 mean
mortgage interest rates are up to 5% higher with up to five
points. Lenders will also require a down payment between 5% and
20%
You can find your score online along with your credit
report. This is a good time to make sure all the information is
correct on your record. Any discrepancies should be checked out
and corrected before applying for a loan.
Know The
Fees
Arm yourself with information so you will know
what are reasonable fees for your type of loan. Mortgage brokers
are paid for their work through points paid up front or through
the lifetime of the loan by the lender. Lenders also make money
through points.
It is reasonable to expect to pay up to
five points for a mortgage loan, but any higher and you should
be wary. There are always exceptions to this, so use your best
judgment and compare companies.
Get Multiple Offers
Mortgage lenders can vary as much as 5% in their interest rates,
so you should compare financing packages. The internet has made
comparison shopping easy. You can get bids from multiple lenders
and read over their offers from the comfort of your home.
Read The Fine Print
Once you get an offer from a
mortgage lender, make sure you read the fine print. Interest
rates are easy to compare, but you should also look over the
fees that are involved which can add up to thousands of dollars.
Also, be sure to understand any fees for late or missed
payments.
|
|
|
|
|
|
