Are Bad Credit Re-Mortgages
Impossible? |
By John Halsey |
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So many of us feel that having bad credit will make a re-mortgage
impossible or very close to impossible to say the least. With so
many of the traditional lending institutions not even wanting to
speak to us, slamming the proverbial door in our faces before we can
open our mouth to speak our case, very few options seem to be left.
But there is hope- and yes, a bad credit re-mortgage is 100%
possible! You just need to look beyond the banks, a ways past the
non-traditional lenders.
Believe me, potential creditors
don't care why your credit is poor, just that it is - so you don't
feel the need to explain. Some of us have gone through the
unpleasantness of a divorce, creating a drop in finances and related
credit score. Others lost their employment and have fallen behind on
their bills. Still others had to file bankruptcy for one reason or
another. Whatever your situation, you just need to find a quality,
sub-prime mortgage lender!
Sub-prime mortgage lenders
specialize in people like us, both for refinancing a current
mortgage (also known as a re-mortgage) or buying a new home. Of
course, there are a few things you should be aware of before you
take advantage of one of these loans.
First, you should know
that the lower your credit score, the more your re-mortgage is going
to cost. The current industry average (sub-prime/bad credit
re-mortgage industry) is 4%, but can go as high at 7%. This means
that you, as a bad credit home loan borrower, are typically charged
an average of 4% more than a borrower with good credit that's
getting into the same general loan program. This percentage can be
in charged in a bunch of different ways, including interest, points,
and a wide variety of bad credit fees.
Don't think that
the types of mortgages that you can qualify for are extremely
limited, because you couldn't be more wrong, they're just going to
cost you a bit more. You can even apply for a mortgage that allows
you to take out extra money to pay off high-interest credit card
bills and auto loans, if that's what you need to help your financial
situation!
Of course, your interest rate will also reflect
your LTV, or Loan to Value ratio. This number stems from the amount
your home is worth and compared to the amount of the loaned mortgage
amount. The higher the loan amount to your homes worth, the more you
will pay each month. This is true of all mortgages, no matter what
you credit score may be.
Before signing any re-mortgage
agreement, be sure to shop around to get the best deal. This will
also keep any predators at bay from trying to take advantage of you
as you re-mortgage your current home loan! |
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