When I worked as a loan officer, it wasnt unusual for me to come across people who thought they were out of luck because they had bad credit.
This is really not the case, although it is fair to say that you would not be able to walk down to your local bank, have a seat in the branch managers office and walk out with a mortgage.
However, there are alternatives, and you do have choices.
If you contact a broker, tell them your situation, be completely honest and up front with them, otherwise you are just wasting their time as well as your own, and believe me, whatever your situation may be, they have heard worse. Nine times out of ten they will be able to help you.
Conventional banks are not the only ones that lend money. Brokers have access too literally hundreds of banks with a wide variety of programs for people in unique situations from foreclosure buy outs, to 100% financing with poor credit scores.
I speak from experience, because when I was a loan officer I did mortgages for people in unique situations.
Foreclosure buy outs, bankruptcy, late payments on prior mortgages, the list goes on.
I would sit down with my customer, take down as much information as possible, than present their information to many different lenders for them to review. Most times I would find one with a program to help my customer.
Keep in mind, with unique situations, there is risk involved on the part of the bank, so you cant expect to get the best rate in the world. But if it is reasonable, and can put you into the situation you want to be in, than it is well worth it.
So if you think your credit, or a bad situation is preventing you from getting a loan, think again, there is probably a program out there for you, you have nothing too loose.
There’s only one way that people are freeing themselves from the shackles of bad credit and that is to create a new credit file on themselves within the credit bureau’s computer system.
That is the opening statement of one Credit Repair Book being sold on Ebay. The book tells you to make changes to your social security number, your name and address. It tells you how easy it is to get a NEW Drivers License and other back up documents, and how to use these documents to create a NEW Credit File. My first impression is havent these guys heard of Homeland Security and all of the anti terrorist laws? There are people out there who are looking for individuals who are creating just these types of false identities.
There is another theory that has made the rounds of the Internet for years that states that the only time you have to give anyone your Social Security number is when requested by an employer or the Government. That may be true, but when you REPRESENT to someone that you are giving your true and accurate information for the purposes of obtaining credit, AND you are in fact giving false and misleading information. That is FRAUD. You might not get caught, but if you do get caught the pain will not be worth the gain.
DONT DO IT !
By now almost every adult in this country knows the positive and negative aspects of a Credit Score. As our economy moves away from Paper Payments, the condition on ones credit will become more and more important.
Already, Insurance is rated by the consumers credit rating. Mortgage, installment and revolving rates can vary by several points. The lower your score, the more it cost you for basic needs.
Poorer people usually have lower credit scores because they dont have any extra income to allow for emergencies and they are more inclined to miss payments.
Increasingly, Employers are running credit checks on prospective employees which means that a low credit score could cause you a better job. Ironically, that job could have given you the means to climb out of indebtedness.
As a consumer, you job is to get your credit score as high as possible and keep it there. That way you can bank your savings and prepare yourself for an emergency. This might take some Guerilla tactics and a little smoke and mirrors, but that is okay. By repairing your credit, you will have the pride of taking charge of your life. You will feel in control and have a great sense of accomplishment.
When you have your credit file all polished up, bright and shinny, you should look at it as your Masterpiece. Treat it as a remarkable and valuable asset that took a lot of sweat and time to get just right.
Buying A Home With Bad Credit – How To Buy With Past Credit Problems
Late payments on credit cards, automobile loans, and medical bills can greatly reduce your credit score and give you a bad credit label. Years ago, it was extremely difficult to get approved for a home loan with bad credit. However, many lenders are offering a range of bad credit loans that make homeownership a reality for the millions of people living with poor credit.
How to Benefit the Most from a Bad Credit Mortgage Loan
Bad credit mortgage loans have several benefits. Many people avoid these loans because of the higher interest rates. Instead of focusing on the negative aspect of bad credit mortgages individuals should reflect on the fact that these mortgages can help improve credit rating. Higher credit scores will qualify you for better mortgage rates in the future.
Although individuals with poor credit have options, it is important to take necessary steps to help improve your credit score before applying for a home loan. Moreover, when the time comes to find a lender, shopping around is essential for locating the lowest rate.
Make Slight Credit Improvements before Applying
Improving credit score is a long process that requires determination and patience. If you are hoping to buy a home with past credit problems, its wise to fix credit issues before applying for a mortgage. Credit has a huge role in the approval process. Lenders prefer good credit applicants. Nonetheless, they are willing to work with those who have a low credit score.
Having good credit opens the door for many financing options. Furthermore, better mortgage rates are offered to those with a high score. There is a difference between having bad credit and terrible credit.
If you have bad credit, getting approved with a comparable rate is doable. However, you must search for a good lender. On the other hand, if you have very bad or terrible credit, it may be more beneficial to delay buying a home and make credit improvements.
Request Quotes from Multiple Lenders
Shopping around for the best mortgage rate is critical for homebuyers with bad credit. Too many lenders prey on individuals with a low credit rating because they have fewer options. The key to avoiding a lenders scam involves shopping around and comparing quotes.