Debt Consolidation Bad Credit

A bad credit mortgage gives borrowers with a poor credit history the opportunity to not only buy a home or refinance their current mortgage but the best opportunity to raise their credit rating over time. In most instances, whenever you apply for any type of financial product like a mortgage, the lending institution could pull your credit report.

In a nutshell, your credit rating is a compilation of your history of how timely you've paid your bills. Anytime dollars may be lent it is used because it is the best way for a lender to determine the risk involved for a particular borrower.

Tip - The online lending industry is very competitive. You could find many lenders who specialize in bad credit mortgage services.

Making the decision to issue or approve a bad credit mortgage is primarily determined using the credit score pertaining to the borrower(s). Credit scores might range from 400 to 800 with everything lower than a 620 poor including everything over a 720 very good. On the other hand, even if you have a credit score as low as 580 there are many lenders with mortgage programs that could finance up to 100% pertaining to the loan amount. Of course, the lower your credit score the higher interest rate you could pay including in most instances you could only be offered a particular ARM (Adjustable Rate Mortgage) that has a 2 or 3 year fixed interest rate including then it goes up.

Tip - Most states have lending laws that state a lender might only charge interest rates a certain percentage above the retail or normal market interest rate for borrowers with bad credit. Normally the rate is 5% - 8% higher but even that in many instances is extreme.

A myth regarding credit reports is that each time your credit report is pulled it negatively affects your credit score. the is true only if you apply for credit products like credit cards including only if you apply for a large number of them in a short duration of time. However, the does not apply in the case of mortgage lenders, unless you applied for a mortgage from a very large number (i.e. like 15 or 20) of lenders within 30 or 45 days. Only then will it be slightly affect but in general at the time a lender pulls your credit report it could not be negatively affected.

Tip - For options in finding the best lender for you, check out the links below.

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Written By: Kevin_Erickson