After the failure of institutional giants, such as Lehman Brothers and Washington Mutual, the purse strings of the financial industry have been tightened considerably. It’s nearly impossible to locate a bank in this country that will lend a person money without significant proof that they will be able to repay it. But, even if you have poor credit, you can still find help. Bad credit home loans are still available if you are willing to look and do the work. While reading a lot of articles I found this Dutch article about geld lenen met BKR.
Indeed, the criteria for qualifying for a home loan has become tougher, but a good credit history isn’t the only factor lenders consider when deciding to loan money. It’s a Catch 22, poor banking practices has led to the increase in people with poor credit; too many people without the ability to repay had been given loans in the past.
There are plenty of lenders offering bad credit home loans to people with poor credit. Having collateral, a steady employment history, a monthy income and good history of paying other bills are factors that could make your chances of securing a loan more favorable. Just know that you might not qualify for a low interest-rate loan if your credit is less than perfect.
With a new home purchase, if a person expects to qualify for a bad credit home loan, he or she will be required to make a significant down payment that will give the prospective homeowner some major equity upon closure of the loan. More money for your down payment is required by the bank if your credit is especially bad.
Some lenders require borrowers with poor credit to enroll in credit counseling before issuing bad credit home loan. The hope is that this will provide instruction on how to create a budget that ensures all payments will be made in a timely manner while leaving the customer with enough cash to handle day to day occurrences and necessities.
Credit counselors also help people manage their finances so as not to repeat the poor-credit cycle.
A second mortgage, whether you have good credit or bad credit, is one of the most toughest loans to get. You might find it easier, if you have equity in your home yet still owe a big amount, to refinance your current loan rather than take one out against the equity on your home.
It is not uncommon for people to have a poor credit score these days considering the current economic crisis, loss of jobs and general recession. Banks are being choosy, and finding a home loan can be difficult if you have poor credit. Prospective borrowers should not get discouraged, however, because there are lenders out there who are eager for their business, but with just a few more restrictions.
John writes about finding home loans and mortgage refinancing for people with poor credit.
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