Bad Credit Mortgage - A Life Saver
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Posted On :
Oct-17-2010
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Article Word Count :
563
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Bad credit can lead to a very tight credit situation when you may be planning to buy a property or clear-off your previous debts.
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Bad credit can lead to a very tight credit situation when you may be planning to buy a property or clear-off your previous debts. You would also have to deal with the pangs of meeting installment deadlines and at the same time face the difficulty of winning the confidence of your lenders. If you belong to the low-income bracket, then the situation becomes more perplexing. However, there is some respite to be found in such a situation, as there are some governments and private mortgage programs that can help you get out of such stages. Basically there are two types of mortgage loans, secured and unsecured loans, the later ones being more preferred due to the absence of any requirement of any guarantee.
Ample changes have been brought in the legal system due to economical factors, and due to this reason many lenders have now started considering individuals with a bad-credit history to apply for mortgage loans. It is more rational to select government mortgage programs due to their low interest and application charges. However, the difference between the government and private mortgage plan differs mostly by 1 to 2 % interest rate, the higher being for private loans. There are some unique offers and even some loans available with private lenders that compensate the higher interest rates and also increase your chances of qualifying.
Low-income bad credit mortgage loans attract even higher interest rates due to their long repayment period. In addition to interest rate, the down payment and closing charges accrue heavily on low-income applicants. However, you can even find mortgage lenders who provide better offers that necessarily do not require any down payment. One point needs to be noted here by applicants that most private lenders consider themselves at risk from such borrowers. Hence, in most cases you may have to agree for weekly payment mode.
The numbers of government bad-credit mortgage loans are far lower when compared to the private ones, but as mentioned previously, they can be financially more viable. There are primarily two bad-credit mortgage loan programs run by the government - the Federal Housing Administration program and the Veteran Administration program. The Federal Housing Administration is an agency that aims to provide loan to low-income individuals in buying a house.
The mortgage loans from the veteran administration are provided only to the veterans. Your veteran eligibility certificate is an important document of the application process. However, if you qualify for this bad credit mortgage loan, then there is no need for you to make any down payment. Similar to the other government mortgage loan, the interest rates for veterans are also lower as compared to prevailing market rates.
A useful tip to increase your chances of availing a mortgage loan is that applicants with a good credit history ever in the past are allowed to present a written explanation for some uncontrollable situations leading to the bad-credit situation. Reasons like acute illness, loss of employment, disabilities, etc. are normally considered for qualification by lenders.
If you have been going from one lender to another without any success, then remain assured that the qualifying guideline for a bad credit mortgage loan varies from one lender to another. Practically, there are hundreds of reliable brokers in the market which are more than ready to offer their products to you.
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Article Source :
http://www.articleseen.com/Article_Bad Credit Mortgage - A Life Saver_38041.aspx
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Author Resource :
To know more on what is bad credit and essential tips on bad credit mortgage, visit our website.
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Keywords :
bad credit mortgage, bad credit mortgages,
Category :
Writing and Speaking
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Writing and Speaking
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