Home Purchase Mortgage Loan
Many folks who want to purchase a house and have bad credit have the fear of applying for a home purchase mortgage loan because they think their credit is too bad and think they will get rejected. Whatever your credit score is, whether it is in the 400s or 600s, seek a mortgage broker for a free consultation. The mortgage broker will evaluate your credit profile and tell you what you qualify for and the home purchase mortgage loan programs that are available to you. If you do not qualify, the mortgage broker will tell you what you need to do to be able to qualify for a home purchase mortgage loan.
Home Purchase Mortgage Loan Guidelines
There are certain home purchase mortgage guidelines that every home purchase mortgage loan applicant needs to adhere to such as waiting periods for bankruptcy and foreclosures. There is a two year waiting period after having a bankruptcy discharged for a home purchase mortgage loan applicant to be able to apply for a home purchase mortgage home loan. There is a three year waiting period after a foreclosure for a mortgage loan applicant to be able to apply for a loan. The three year waiting period is three years from the date of the sheriff’s sale of the home or from the date the name of the deed was transferred out of the owner’s name. Your mortgage broker might be limited on the type of home purchase mortgage loan programs he or she can offer your from his wholesale lenders so you might need to go to different mortgage brokers who specialize in lending to borrowers with prior bad credit. It is always a good idea to speak to multiple mortgage brokers and choose the broker that you best feel comfortable with. Some mortgage brokers might only be able to do loans for borrowers who have credit scores of 640 or higher. Other mortgage brokers, like myself, can lend to borrowers whose credit scores are down to 530 FICO. Some loan officers might not have wholesale lenders who can give a mortgage to a borrower with open collection accounts. I do have lenders who will tolerate open collections. Depending on your credit profile, there will be a home purchase mortgage loan program that best suits your needs.
Home Purchase Mortgage Loan Programs
Housing prices are still at an all time low but it is creeping up in value. Nobody has a crystal ball but if I were a betting man, I would say that right now is the right time to buy a home. No need to rush but why not start with the home purchase mortgage loan application process now and see where you stand. If you had very recent late payments such as late credit card payments or a late auto payment, your credit scores probably plummetted at least 50 or more points. Plus you might have to wait at least six months or more to qualify for a home purchase mortgage loan. Any mortgage lender will probably want to see at least 6 months of timely payments on a borrower’s credit report. Most require at least a year worth of timely payments. Make sure you are always timely with all of your monthly payments.
With home prices still at historical lows, purchasing a home now instead of later and applying for your home loan now with bad credit could potentially save you thousands of dollars as the housing and real estate market starts to recover and house values start to appreciate.
Mortgage Rates on Home Purchase Mortgage Loan
If you get a higher mortgage interest rate due to having prior bad credit, make sure you make your mortgage payments timely. Your credit scores will improve as you build a credit history of paying your bills on time. Get 3 secured credit cards and make sure your balances are low. Always keep your balances below the 50% credit limit mark. Once you have established a one year payment history with your secured credit cards, you will be able to get unsecured credit cards. Again, always pay down your credit cards every month where your credit balances remain below the 50% level. After six more months, you will be able to get another one or two more unsecured credit cards. Eventually, your credit scores will surpass the 700 credit score mark. Once your credit scores are above 740, you will be eligible for premium mortgage interest rates. You can then price out what the current mortgage rates are and see if refinancing your current mortgage loan would be feasable.
Refinance Mortgage Loans
When considering refinancing your home because you now have premium credit, you need to consider the closing costs. Refinancing can be extremely expensive. If you are a Florida homeowner and want to refinance, you need to take into consideration not just the appraisal fee but title charges, transfer stamps, and other closing costs that can cost you several thousand dollars. If you intend on staying and keeping your home for several years, it might be worth refinancing but if you are planning on moving within couple of years, you need to figure out a break even point. You can contact any mortgage broker or you can contact me and I can go over the figures with you and advise you whether it makes economical sense. Please do not hesitate to contact me at www.gustancho.com or call me at 262-716-8151. I am available 7 days a week.
Gustan Cho NMLS ID 873293