Mortgage for Bad Credit
Did you know that lenders look at your credit history and score to determine your borrowing potential? If you have a good score, you are more likely to be approved for a home loan. If you have bad credit, your application may be denied. However, in some cases, it is possible to receive a mortgage if you have bad credit.
Basics of Bad Credit Home Loans
Applying for a home loan through a non-bank or specialist lender is your best shot at being approved. These non-conforming lenders assess each individual’s situation to understand how they developed lousy credit.
Generally, the following types of bad credit home loans are approved:
- Paid and unpaid defaults
- Discharged bankrupt
- Part 9 debt agreement
- Tax debt
- Debt consolidation
Your lender will assess your situation to help you choose which loan is right for you.
Each lender has its own standards for deciding how much you can borrow if you have bad credit. However, these are the general guidelines:
- If you have a default less than $500 paid longer than six months ago, you can borrow between 90 and 95%.
- If you have paid defaults less than $1,000 from banks or other lenders and paid defaults less than $500 from other companies, you can borrow between 85 and 90%.
- If you have paid defaults of $3,000 or less, the amount you can borrow depends on the type of lender you choose.
- If you have paid defaults over $3,000, the lender will decide the amount you can borrow based on your case.
- Most lenders require you to pay off any unpaid defaults before they allow you to secure a home loan.
Securing a home loan if you have bad credit can be challenging, but it is not impossible. Mortgage House is a non-bank specialist lender whose team of brokers can find a loan that works for you. We work hard to understand your situation, helping you secure a loan even if you have poor credit. Visit our website or call us to find out more.