Bad Christian Credit Home Purchase
Making a bad Christian credit home purchase is not impossible but it can be difficult for a number of reasons. The first has to do with the recent mortgage market mess that has tightened what was an easy mortgage market into one that has made maneuvering through much more difficult. The second has to do with how credit is figured among lenders. Knowing how each lending entity looks at a person with a less than stellar borrowing history can help in knowing how to accept declines for lending and where to expect a yes. A good place to begin the discussion would be how lenders look at borrowing history and the debt to income ratio. More than ever, a person seeking a bad credit home purchase really needs to do his/her homework before signing on the bottom line.
Dreaming about one's own space instead of paying a landlord is the hope most Americans have, even if it is a bad credit home purchase. The first place to start is knowing one's own credit score. One of the three major borrowing score reporting companies can be accessed online for securing a credit score and then a first assessment needs to be made, so unless there is a close relative in the family that is a bank president, these financial institutions do not look at a person with a credit score under 640. This is a fairly hard and fast template to prescreen applicants for any kind of loan. However, even if a person does have a score above 640, the debt to income ratio is the other hurdle one must face. A bank does not want a person or a couple to have more than 40% of their monthly income devoted to loan repayments. And if a person is renting at the moment and is trying to buy a residence, then the ratio has to be around 20% so that the mortgage only takes it to 40%.
But a banking institution is only the first stop along the way to making a bad credit home purchase. A credit union has almost as stringent lending policies as a bank, but tend to look at a person in a holistic manner rather than in a template way. Each cu, since often independently owned may have its own set of criteria for lending money, so all of them within a comfortable driving distance ought to be checked out. The reason for banks and cu's being mentioned first is because generally speaking, these lending entities have the lowest interest rates for mortgages. But there is more to a mortgage than just the interest rate.
Now would be a good time to stop and talk about points on a mortgage. When a person looks in the paper and sees a number of mortgage companies offering loans, not only will the interest rates for different loans be listed, but also the points for each type of loan. A point represents one percent of the total loans, this is the money that the lender or broker makes on the sale of the mortgage being offered. When making a bad credit home purchase, great care needs to be made in all of the fees and points added to the cost of the mortgage. Origination fees, discount fees, broker fees and yield spread premium are all different ways of saying the same thing. A fair type of loan will list all of the points in an upfront manner. A scammer will charge many more points than the industry recognizes as being fair. Sometimes a borrower has the opportunity to pay more points to buy down an interest rate, and if the borrower knows he/she will be in the house more than five years, that option could make sense.
If a bank and a cu's doors are closed to your bad credit home purchase plans, the next place to try is a mortgage broker or lending company. These two types of lending entities are funded by investors who are willing to take higher risks on borrowers with less than stellar histories at handling credit. For a higher interest rate to the borrower, a high risk investor will not be nearly as interested in borrowing history scores or debt to income ratios. "Therefore being justified by faith we have peace with God through our Lord Jesus Christ." (Romans 5:1) But there may yet be one more way to make a bad credit home purchase.
An owner financed mortgage may be the ticket to making a bad credit home purchase possible. This loan is also called a seller carry back loan, which means the owner is so desperate to find an owner that he/she is willing to front the loan for a period of years, or maybe even the entire thirty year period. A person may pay a little higher interest rate with a carry back lending agreement, but it can also mean saving thousands of dollars in points fees. To make this work, one needs to have an attorney help draw up the papers and represent the borrower in order to protect him/her from future complications that could arise. For a person with a poor borrowing history, a seller carry back loan may be the brightest hope for a home purchase. Start driving around town or the country and look for the owner camped out front with a harried look on his/her face and a sandwich board sign that reads, "Rescue me from another day in this house!"
Bad Christian Credit Home LoansBad credit home loans may offer those with poor financial history the chance to own their dream house. In the past, only those with stellar ratings were able to apply for quality home loans, but this is no longer true. Bad credit home loans are offered to those who have earned a poor credit rating but are still considered responsible enough to undertake a mortgage. If peoples' financial score has suffered from some temporary setbacks, and they are trying to establish a responsible account history from this point forward, then a bad credit home loan may be their prime opportunity.
When taking out a bad credit home loan, it is crucial that people do their homework to ensure that they are not a victim to their financial score. Those with low ratings will have to be more patient and persistent to secure a decent interest rate, but it can be done. The first aspect one needs to consider is whether to approach a bank or a mortgage fund company for their bad credit home loan. Banks are more likely to turn down those with poor financial history, but many mortgage companies may be able to offer them more choices when it comes to funding.
If a person chooses to take out funds with a mortgage company, they should be sure to check the rates from several different companies. The rates for bad credit home loans can vary greatly due to seasonal trends, mortgage sales, and reputations of lenders. Researching companies will guarantee that people choose a reputable lender with high satisfaction rating from previous borrowers, and secure a fair interest rate. How a company treats all of their customers will be very important when taking out needed assets.
Once people have decided on the company, it is time to negotiate the best deal. They will not be able to take out a bad credit home loan without a down payment. Most companies will not offer funding with a down payment of less than five percent, but it is recommended that one put down a full twenty percent in order to avoid having to purchase private mortgage insurance. People may also be able to negotiate on some of the fees. Although negotiated funds will automatically come with higher fees, some of them can be waived if people ask.
Getting help may be someone's chance to prove themselves financially to lenders. Whether or not they have made financial mistakes in the past, it is imperative to practice good money management skills from now on so that one will not have to take out funds next time. God requires that Christians become financially responsible. When them have proven themselves to God in little ways, He will bless people abundantly. "Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities" (Luke 19:17)
A bad credit mortgage loan can help those who have a damaged credit report qualify for a mortgage and purchase a home for their family. With bad credit mortgage loans, consumers and homebuyers with poor ratings will also have the opportunity to improve the credit reports by proving they are responsible as they rebuild financial credibility with timely mortgage payments. There are lending companies that specialize in bad credit mortgage loans, and know how to work with those who have suffered financial devastation. Interest rate quotes for poor credit mortgages will depend upon the current condition of the economy and will also depend upon the extent of the damage listed on the report, but those with damaged histories can receive workable terms and rates if they are persistent.
By searching the Internet, the prospective borrower will find a number of companies offering assistance to those with poor financial records. The terms of these transactions can differ in terms and rates, depending upon the company and the individual's report. Homebuyers looking for a mortgage loan should comparison shop several companies before jumping into an agreement. Homebuyers will want to find the best bad credit mortgage loan option for their individual financial situation, and make sure that they can faithfully make monthly payments on the debt. Not paying that note could result in the loss of the home.
Everyday people that have experienced financial devastation want to invest money into a home for security and financial reasons work with bad credit mortgage loans experts. A bad credit mortgage loan company can help those with tainted reports of their financial status to find a loan that will meet their level of income. These companies can also help homebuyers determine how much they can afford in monthly payments, and what price house for which the borrower qualifies. Making monthly payments on a house can help increase a borrower's rating and prove that the borrower is a good financial risk for other lending agencies that may be needed in the future.
Financial trauma can ruin a report for years to come. Getting that report back in good condition is crucial to operating within financial systems in the U.S. Christian owning a home and making payments can be the beginning of creating responsible payment habits and establishing a new financial future. God is full of mercy and second chances. If you have the opportunity to rebuild financial stability and character with responsible house payments through bad credit mortgage loans, then thank the Lord for this blessing. "This I recall to my mind, therefore have I hope. It is of the Lord's mercies that we are not consumed, because his compassion fail not, they are new every morning; great is thy faithfulness." (Lamentations 3:21-23)