Prevent Foreclosure of Your Home if You have Bad Credit

Prevent Foreclosure of Your Home if You have Bad Credit

Getting a home loan with a bad credit has never been easier. Here are some of the tips recommended by experts to improve your chances of getting a home loan:

If you can snap up a home as cheaper rates compared to the local market, you may have an easier time getting financing on that property. To the lender or financial institution, it is as good as having a down payment on your home. There are some lenders who consider loan to value ratio before approving a home loan. Ask your mortgage lender if this factor can help you get qualified for your home loan.

If the seller is motivated, ask if they are willing to carry back a second mortgage on the home. On approval, you can set up a contract or agreement with the seller that you agree to pay monthly payments on the property, as a second mortgage. To make it easy on the seller, it is best recommended to have an end date by which you intend to pay back the amount owed. On an average, 2 years are enough for you to refinance the second mortgage and the seller does not feel permanently locked into the agreement.

You may be able to qualify for a 100inancing even with a bad credit. However, if you pay a 5-10own, your interest payments will be much lower. Try to save as much as you can for your down payment. At times, it is best advised to wait for a few months to be able to make a down payment. If you cannot afford to have a down payment, you may always refinance your loan later for a lower interest rate.

It is important to do a comparison shopping and get loan quotes from multiple lenders. If you have a bad credit, you will be surprised how much the interest rate varies. Let the loan lender know that you are getting multiple offers and you are considering the lowest rates. Lenders will squeeze their margins to win your business. Request a free credit report from any of the credit bureaus. If you were denied credit recently, you can get a free report. Report any inaccuracies as soon as possible. Now it is easier to report inaccuracies on the websites for each of the three credit bureaus. Too many credit cards can negatively affect your credit score. Close the accounts that you no longer need.

Don’t let bad credit stop you from owning a home. There are plenty of lenders out there to get a piece of your business. Apply with multiple lenders and compare their offers. Have you ordered your credit report? Remember by September 1, 2005 every state will be required to allow you to one free credit report each year. If you are denied credit for any reason you are entitled a free credit report. Under any other circumstances you will have to order one.

If you have ordered your free report, have you looked through to make sure everything is correct? If it isn’t then this is the article you need to read. Each credit bureau needs to be contacted. One bureau may have the correct information while the other two are wrong. By contacting each credit bureau you eliminate the hassle of having to do the process again when you find out that you didn’t do it right the first time.

When writing to the credit bureaus, address one mistake at a time. If you report more than one mistake the credit bureaus can, legally, say you are filing a frivilous report and do nothing about it. Keep your letters down to one mistake and one mistake only. Yes, this may take some time to get through all the mistakes, but it is time well spent. Each of the credit bureaus have PO boxes specifically set up for complaints. They change their PO box addresses often to make it harder for customes to find and complain.

The credit agency must get in contact with the creditor that is reporting the late payment/incorrect data within 30 days and either change the data, if it is incorrect, or delete the data altogether. If they don’t get a response from a creditor within the 30 day period they have to delete the data. This puts trying to correct mistakes to your advantage. Trying to straighten out your credit can be a time consuming process and you may wish to use a credit agency to help you get everything correct. As always though, let the buyer beware. Credit repair scams are everywhere and if you don’t watch out you can become a victim.

Persistency pays off by getting you a better credit rating and credit score. By repairing your credit you should be able to get a credit card, home loan, auto loan, refinance, etc., that you have been looking to get and be able to get it at better interest rates. Foreclosure loans are needed by some in order to avoid losing their home. A home is usually a person’s largest financial possession and losing a home to foreclosure can have dire impacts on one’s life and one’s credit score (for the next 7 to10 years). It is extremely important to stop foreclosures at all costs, if possible.

One way to do this is by taking out a foreclosure loan. Sometimes called hard money or bridge loans, a foreclosure loan is usually a short-term loan (1 – 2 years) that has the sole purpose of paying off the missed mortgage payment and stopping the foreclosure before the sale date of the house.

Usually foreclosure loan lenders need to know four items before they can process the loan:

1. State the foreclosure home is located in
2. Mortgage balance
3. Value of property
4. Foreclosure sale date

Since layoffs and threats of unemployment may cause many to worry about foreclosure, HUD and the Department of Veterans Affairs (VA), the Department of Labor and the mortgage industry have come together to offer low interest foreclosure loans. The most obvious place to check with for a foreclosure loan though is with the original lender for your home.

Several foreclosure loan options may be available that you hadn’t even thought of before. For instance, a lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. This option is usually combined with something called forbearance. In forbearance, the lender may allow you to arrange for a reduction or suspension of payments for a short period of time after which another option must be agreed upon to bring your loan current.

Another kind of foreclosure loan is a mortgage modification loan. For those who can make their payments on your loan, but do not have enough money to bring their account current or cannot afford the total amount of the current payment, their lender may be able to change one or more terms of the original loan to make the payments more affordable.

For those with mortgage insurance, you may qualify for a claim advance. A claim advance is an interest-free loan from the mortgage guarantor to bring your account current. The repayment of this loan may be deferrable for several years. Your lending institution or another institution may even have some other options not listed here. It is important to discuss your situation with your lender first to see what the options are for stopping foreclosure on your home. Acquiring a foreclosure loan may just save your home and your financial security for years to come.