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This article discusses how Bad Credit Mortgage Lenders can help those with poor credit maintain or obtain a mortgage. If you watch television commercials for credit score reporting companies like Credit Karma, you might think that you can’t accomplish any of your goals in life if you don’t have the right kind of credit. You won’t be able to buy a car, you might not even get an unsecured credit card, but you definitely won’t ever own a house. Having great credit definitely makes things easier.
It’s true that keeping a high credit score makes things a lot easier when it comes to borrowing money. Those “zero-interest” car loans that dealers offer when they have too much inventory become accessible. So do those credit cards with the point programs that reward you for purchases, instead of coming with membership fees and service fees. The banks will also pay more attention to you if you go in looking for a mortgage if you have maintained a high credit score. The best way to do that is to make all of your payments on time and maintain low balances on your credit cards.
Using a Private Lender to Overcome Immediate Refinance Obstacles
There are times when life throws a wrench in your plans. Perhaps, your spouse got cancer and couldn’t work anymore, and even though they had short-term disability insurance, it didn’t last long enough. In a case like this, your bills continued to mount. You are now considering selling your home to cover expenses, but not before being late on some mortgage payments, and also missing some car, credit and loan payments. All of this has dragged your credit scores down to a place where your bank does not want to extend you more credit. To make matters worse, your bank has actually started legal action and you will have a foreclosure registered on your property title. In addition, other banks also do not want to refinance you because they see your family as high risk.
So you have 2 options. The first option is to sell, and deal with the added stress that comes with selling and buying… And Good Luck trying to get Fair Market Value if you have a foreclosure registered on property’s title. If you have youngsters, you may need to move to a different neighborhood and relocate them to new schools. The other option is to refinance or take out a second mortgage. If you have more than 25% equity in your home, you may be a good candidate for a private mortgage. A private mortgage would act as a great bridge to buy you some time to get affairs in order so that you can refinance in a year or two. If you are fine with selling, but just need more time, a private mortgage can also help so that you have enough time to ensure your home looks it best before listing it. What many people are unaware of is that there are Private Lenders that can arrange a mortgage in a way that you have no payments during the transition period. We are very familiar with this type and arrangement and provide you with the proper guidance. Provided there is enough equity, there are many ways to make a Private Mortgage work for you to get you through tough times. Now if you don’t have the required equity, there are companies that will purchase your home and allow you to remain as a tenant. We can refer you to such companies that provide Rent-to-Own Refinances.
Use a Bad Credit Private Lender Enter or Re-Enter the Real Estate Market
Now if you were in the same or similar situation previously stated and you ended up selling without the knowledge that you had Private Loan Lender Options, You’d think that your only option is to rent forever. This isn’t the case. If you’ve saved up more than 25% down payment or more or have inherited a lump sum from a will or an estate, but your credit still needs some repair, you may still have some serious options.
Amansad Financial has connected many people in your financial situation with mortgage lenders for poor credit to start those borrowers on the path to home ownership. Home loan lenders for people with bad credit don’t look at your credit score; instead, they look at the value of the property you want to buy and consider whether the LTV (loan to value) ratio fits within their parameters. They know that your credit score isn’t high enough to merit a loan on its own, but the fact that you have a significant down payment could make the loan make sense because if you do go into default, the private lender could get all of its money back out of the deal.
How does it work? Let’s say you found a $300,000 house that you would like to buy. You’re aware your credit isn’t the greatest but you do have a solid income history at levels that will let you make the mortgage payments within your budget. You also have $100,000 to put down — more than the 20 percent that banks want in order to make a conventional loan. However, when it comes time to qualify, you realize that credit is far worse than anticipated and even with more than 20%, the banks are saying no.
Private Lenders for bad credit would still lend you the $200,000, and that would become your mortgage amount. The appraised value of the house is $300,000, so even if you default, the Private Lender should be able to get his money back. The term of this loan is only likely to be 12 months with most requiring interest only payments. Making interest-only payments allows you to have more disposable income to take care of your other credit obligations. The purpose of this is to give you time to improve your credit so that, by the time the loan comes due, you can qualify for bank financing and pay off the Private Mortgage. If you pay the Private Mortgage well during the term and the market conditions remain stable, a renewal is often provided if more time is needed.
Amansad Financial has a large network of Private Lenders and has connected many clients with Bad Credit Mortgage Loan Lenders who’ve helped people either stay in their home or get into the home of their dreams. We can do the same thing for you. Give us a call or Get Pre-Qualified through our fast 1 minute pre-qualification form today!
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Amansad Financial Services | 2nd Floor, 5303 91st, Edmonton, AB T6E 6E2