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Credit Problems, What You Can Do
By: Jennifer Hershey
Having a blemish on your credit report can lead people to believe that it will
be impossible for them to obtain a mortgage or refinance their current one.
Although having less than perfect credit can be a challenge, all hope is not
lost.
There are lenders out there, and many of them, who specialize in doing mortgages
for people with challenged credit. These lenders are known as sub prime lenders.
You may not be familiar with sub prime lenders because they are not the type of
institution to set up shop on every street corner like the banks.
Sub prime lenders deal with all kinds of special and unique situations. Whatever
your situation may be, there is a good chance that there is a lender out there
with a program for you.
For instance, sub prime lenders have programs for people with poor payment
history, people who have had bankruptcies, people who are in foreclosure and are
looking to be bought out, etc. Over all if your credit history is poor, you will
most likely have to go with a sub prime lender.
My suggestion to you would be to find a broker to shop around for the best
possible program for you.
A broker is not a lender, their job is to guide and educate you through the loan
process. Most brokers have a contact list too literally hundreds of lenders
across the country including sub prime lenders. Allow for the broker to assess
your financial situation, than fit you into a program that you both can agree
on.
The down side to dealing with a sub prime lender is the interest rate. You can
count on it being high. If you have bad credit, the lender will see you as a
risk, and the penalty you pay for being considered a risk is in the interest
rate.
The point is this, regardless of your credit issues, there most likely is a
lender out there who will deal with you, just make sure the deal you agree on is
in your best interest and not in the best interest of the broker or the lender.
When deciding to purchase a home or refinance your existing one, always do your
homework. Continue to educate yourself so you know what to expect going forward,
and don’t be afraid to shop around for the best deal out there. Just because
your credit isn’t the greatest doesn’t mean lenders won’t be competing for your
business because they will.
Your credit can be repaired over time if you pay your bills on time, so make
this a goal and work toward it.
About the Author:
Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of http://www.explainingmortgages.com/, a mortgage resource site devoted to making
mortgage terms and products easy to understand. |
