| If you have had past credit problems that have yielded | | | | However, the same person that cannot get approved |
| you low credit scores but you still want to buy a home | | | | for a conventional loan because of their low credit |
| then you will be interested in learning about poor credit | | | | scores may be able to get approved for a FHA home |
| home loans. | | | | loan because the FHA loan approval process is not |
| As a mortgage loan consultant I work with people | | | | score driven like the approval process for a |
| almost every day that have credit problems, yet still | | | | conventional loan. |
| see the value of owning a home versus renting and | | | | With an FHA loan, one can have some outstanding |
| want to figure out how they can get a mortgage loan. | | | | collections on their credit report and still get approved. |
| I have found that some people think that they have | | | | The killer items are recent foreclosures or |
| bad credit when it is really not so bad and others will | | | | repossessions. |
| think that they have o.k. credit when it is really terrible. | | | | If the borrower is currently in debtor's court/bankruptcy |
| Some people think they have bad credit and can't get | | | | and has been making their bankruptcy payments on |
| a home loan because some other mortgage loan | | | | time for at least 24 months then with the trustee's |
| officer has told them that they can't approve them for | | | | permission they can still get approved for a mortgage |
| a home loan. | | | | loan. One needs to simply request this permission |
| The thing to understand is that mortgage companies | | | | through their bankruptcy attorney. Usually, if the |
| are backed by different lenders. Each lender has its | | | | numbers make since to the trustee, permission will be |
| own guidelines for approval. So, even though a loan | | | | granted and a permission letter will be given to the |
| may be turned down by one lender it may be | | | | borrower. This letter can then be given to their |
| approved by another lender. | | | | mortgage company. Trustees understand the value of |
| In addition, some lenders are willing to take a higher risk | | | | buying a home over renting and will always work with |
| on an applicant in exchange for a higher interest rate. | | | | people to help them better themselves. |
| Some people refer to these type lenders as sub-prime | | | | If the borrower has any outstanding judgments or |
| lenders. However, companies that traditionally handle | | | | delinquent taxes, then these will have to be satisfied |
| home loans for people with good credit will also carry | | | | before a mortgage will be approved. |
| a certain percentage of poor credit home loans in their | | | | Another killer type item is delinquent student loans. If |
| portfolio. | | | | you have student loans and you ever see that you |
| So, the lesson here is that if one has a bad credit | | | | are not going to be able to make your payments on |
| rating they may get turned down by one lender simply | | | | time, then do everything you can to get your student |
| because that lender doesn't handle poor credit home | | | | loan deferred. Student loans in deferred status will not |
| loans at all or because they already have their quota | | | | prevent you from getting a mortgage loan. |
| of sub-prime loans at that time. | | | | The key thing to consider when getting a mortgage |
| Now that we know that an applicant has to shop | | | | loan of any type is whether you as the borrower feel |
| around to find a poor credit home loan, let's also look | | | | comfortable with your new home payments. Based on |
| at some credit items that will affect one's approval for | | | | your income and debt you may actually qualify for a |
| a mortgage loan. | | | | higher house payment than you really feel like fits |
| For a conventional home loan a person's credit scores | | | | comfortably in your budget. Don't set yourself up for |
| will have to meet the minimum required by the lender | | | | failure from the start. |
| before they can get approved. If the borrower's credit | | | | On the other hand if you feel that you can make your |
| scores are too low then their only choice is to improve | | | | payments on time then pursuing your dream of home |
| their credit scores in order to get approved for a | | | | ownership is something that is attainable even if you |
| conventional loan. | | | | have had credit problems in the past. |