With millions of Americans hitting the skids and dropping into bad credit over the past several years, finding a lender to dole out a bad credit mortgage isn’t too difficult. However, since the economic crisis, the rules have changed and stipulations for securing a mortgage with bad credit have tightened.
If you have bad credit and desire to get a first mortgage for a new house, or need a second mortgage on an existing home then you have various options available.
Standard Vs Bad Credit Mortgage
The nature of a standard home mortgage and a bad credit mortgage are basically the same: to put you into a new home, or to provide available cash on equity in an existing home. Both are also granted based on your credit score, but this is where noticeable differences occur.
Having a bad credit score can affect the terms of a mortgage loan significantly. It could require you to pay a hefty down payment, will have much higher interest rates (generally around 3% higher) and will have stiffer fees and penalties.
Cost of Bad Credit Mortgages
Securing and responsibly paying a bad credit mortgage loan will help to build your credit over time and you are often allowed to refinance after 2 years of timely payments.
However, you will end up paying quite a bit for the privilege of acquiring such a mortgage. Higher down payment amounts, interest rates and fees will cost you thousands of dollars more than a standard mortgage based on a good credit history.
Increase Credit Score and Save
It is much better to spend a little extra time increasing your credit score before applying for a mortgage. By doing so, you can take the thousands of dollars saved and apply it to a better home, or use it to better your life.
The credit repair experts at repair-credit-today.com can clean up your credit report and raise your FICO score significantly within a matter of several months. Our proven track record gets results: an average of 8 negative credit items being removed from client credit reports in the first 90 days. Depending on your situation, more removals are quite possible as nearly 80% of all credit reports contain errors, many of which are severe enough to drastically affect your loan chances.
If you’re looking to get a first or second home mortgage, contact repair-credit-today.com and let our credit repair specialists help save you thousands of dollars which you would pay on a bad credit mortgage loan.