Bad Credit Home Loans Get Your Hands On One Of Them
Finding funding for your fantasy house is always feasible
. There are always lenders willing to finance you and make your dreams come true. But what happens if you have bad credit? Does that mean that you will not be able to achieve your goals? Will no one be willing to lend you the necessary funds to carry out your project? This is not necessarily so. There is something called a bad credit home loan, which is a loan specially tailored for those with poor credit.
Everybody deserves a second chance. That is what this article focuses on: second chances. A new start at a new home. Of course that there is no gain if there is no pain, as they say. These loans more often than not carry higher than usual interest rates and require a juicy down payment. It is also feasible to find lenders willing to offer 100% finance for your house, but they are hard to find, so prepare yourself to search even under the rocks.
If My Credit Is Poor, Should I Go Fixed Or Adjustable On The Rate?
As you well know, there are two available options when applying for a mortgage loan. Let us say you have already found a kind soul to finance your property, have you already decided which rate will work out best for you? A fixed rate will be stable and will not vary throughout time, whereas a variable rate will fluctuate according to the market changes. Going for an adjustable rate mortgage is often wise as it can aid you in saving. Of course this depends on your monthly income, if it is high, an ARM is the best way to go. Your loan term should range between 18 to 24 months, as it is advisable to refinance after that time has passed. If you do so, you will probably be able to refinance to a lower rate.
Meanwhile, It Is Credit Fixing Time!
As we said before, no matter what type of rate you choose, taking a short-term loan is always the best choice, as you will be able to refinance later. So what should you do in those two or three years while you wait for the refinance fairy to come? Two words: credit repair! We are not talking about hiring a professional agency to help you rebuild your credit, not at all. There are some actions you can take from the comfort of your home and without spending a dime. First of all, check your credit report for errors. It is very common for people to take for granted the veracity of their reports. But these are carried out by humans, and humans make mistakes. If you find any inaccuracies, research and learn how to fix them.
Now that your credit report is accurate, you can continue to boost your score by paying off any small accounts you may have lying around. You can also pay down any open credit line balances as this will help you to raise your score. It may take you a year or two, but going through this process is definitely worth it because it will make you eligible for a much better deal when you refinance.
by: Devora Witts
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