Mortgages for people with bad credit rating
Are you looking for a mortgage but have a bad credit rating? Many people ask this question, but before i answer what the options are, it is important for us to define exactly what a bad credit rating is. Many people who think they have a bad credit rating, just because of their score, actually don’t have a bad credit rating at all by some mortgage product definitions.
A bad credit rating is someone who has consistent collections, judgments, and rep’os on their credit report that have happened within the last 12 months. If you haven’t had this happen to to you, and haven’t had any recent dings in the last year, you will be surprised to know that an FHA or VA loan product would work just fine for you. FHA and VA are mortgages for people with a bad credit rating, as far as a bad credit score goes.
Now, if you have had judgments, collections, and other dings on the credit, but your score is above a 620, you may be able to qualify for a conventional loan product. You need to look at credit like a justice scale. The higher the score, the more forgiving a bank is to help you out. The lower the score but the longer the amount of time without dings on the credit, the better. Even though a score may be low, there are things to counterbalance the scale so to speak to help you qualify for a mortgage for people with a bad credit rating or score.
If you have a low score, we would absolutely tell you to look into an FHA, or VA type mortgage. These mortgages offer low rates and are more lenient on a low score. The biggest things these loans worry about is if you have not had any issues within the last 12 months. If you have been good for 12 months, you will do great with a loan program like this.