Qualifying for a sub-prime mortgage loan with a foreclosure or
bankruptcy in your credit past is just a matter of finding the right lender. As
long as you have a regular source of income, you can qualify for a
mortgage. The real issue is about qualifying for low rates. But there are
ways to improve your mortgage application.
Ways To Help Your Mortgage Application
A foreclosure or bankruptcy primarily affects your credit for the first
two years after a discharge. While they will remain on your record for
seven to ten years, they will cease to have a significant impact on
your ability to qualify for now rates. Instead lenders look at your most
recent payment habits and debt ratio.
Besides waiting for your credit score to improve, you can make your
mortgage qualifications look more favorable by increasing your down
payment. By building equity into the property, lenders reduce your risk score
and rates. Remember too that you can access this equity at any time
with a home equity loan or line of credit.
Other ways to improve your qualifications are to pay off debt,
liquidate investments so you have cash reserves, and close unused credit
accounts.
Your Lender Makes A Difference
While you can improve your home loan application, one important way to
reduce your loan costs is to find a competitive lender. With rates
varying a point or more between sub-prime lenders, time spent researching
loan quotes will save you money.
Nearly every lender deals with some kind of sub-prime loans, so include
traditional lenders in your search. To use your time most efficiently,
ask for loan quotes on the particular loan amount and terms you want.
With these relevant numbers, you can determine which company has the
lowest costing loan for your particular situation.
Try using one of ABC Loan Guide's Recommended Sub-Prime Mortgage Lenders.
Sub-prime loan rates are usually 1-2% higher for every fifty points
below 650. Itβs important though to also look at closing costs when
comparing sub-prime financing. Often a good looking rate can be a more
expensive loan because of high upfront fees. Protect yourself by carefully
reading the details of each loan quote you receive.
View our recommended lenders for Home Loans For People With Bad Credit. Also, view our recommended sources for a Free Instant Credit Report.
