Mortgages with Bad Credit
Interest rates have dipped even lower, but not many people are taking advantage of them. Many people feel that they can’t get mortgages with bad credit, but the truth of the matter is that most people don’t understand what bad credit even is in the eyes of a mortgage lender.
Bad credit is more than just a low score. A mortgage lender is more concerned about the credit history that goes along with your credit score. What we mean by this is that if you have had derogatory items on your credit report within the last 12 months, you are considered to have bad credit, regardless of what your score it. If you have been clean on your credit history, even though your score may be low, mortgages with bad credit can be attainable.
The best programs to seek out and look into for mortgages with bad credit are FHA and VA loan programs. FHA bad credit mortgages and VA bad credit mortgages are given to people if they can prove their income and show that they have had good credit for the last 12-24 months. This understanding of the credit history can give a lot of people hope. Many people walk into a bank and get denied because they have only had clean credit for 6 months. Instead of giving up and ruining your credit again, just hold on another 6 months to a year and you will be able to qualify! Buying a home and getting mortgages with bad credit is a process that takes time in most cases.
Once you have been clean on your credit, you should be able to qualify for an FHA or VA program as long as you can prove a valid income amount and as long as your debt to income ratio matches the guidelines set forth by VA and FHA. The reason why these two programs are the best for mortgages with bad credit is that they require the least amount of a down payment of any mortgage program. FHA requires a 3.5% down payment while a VA loan requires no downpayment as long as you have been in the army and can prove VA status.
We hope that we have cleared some things up about mortgages with bad credit so that you can better plan for your mortgage future and get the help that you need to make the most of your mortgage qualification experience.