Poor Credit Mortgage - Overcoming Financial Slumber
There is a huge market for homeowners who have credit issues like - poor credit, sub prime loan borrowers. Some years ago what was seen as a sure sign of frustrated mortgage attempt is now opening a new variety of mortgage called poor credit mortgage.
There are loan lenders who specialize in giving poor credit mortgage and helping the larger population who suffers from the drawbacks of poor credit. It doesn't matter what kind of poor credit you have, you can get a mortgage.
A little hard work with poor credit will make it easier to find mortgage with your kind of interest rates. Usually mortgage borrowers are totally clueless about their credit score and suddenly realize that they are labelled as "poor credit". Poor credit rating cannot, in principle, prevent you from having a mortgage. However, it will surely have impact on the mortgage interest rate which is fundamental.
You would be applying for poor credit mortgage if you have any of these things on your credit report.
? Bankruptcy will undoubtedly result in poor credit this is what most people know. But a chapter 7 bankruptcy will have more negative effect on your poor credit mortgage application than chapter 13 bankruptcy. In a chapter 7 bankruptcy all you debts are discharged, while chapter 13 bankruptcy you pay some of your debts before being discharged.
? A foreclosure lawsuit can result in poor credit and can affect harmful consequences on your mortgage application. Keeping regular on mortgage payment is the best way to avoid a poor credit.
? A debt sent to debt collection agency will result in poor credit and reflect on your mortgage application.
? Any judgment against you will result in poor credit. Any thirty day late payment will mark as poor credit on mortgage application.
? Every time a credit check is done, it reports on your credit report. A few credit checks are fine but many credit checks will result in poor credit.
Whether you have poor credit or not is determined by credit score. While applying for poor credit mortgage you must know beforehand your credit score. Being aware of poor credit score would place you in a strong position when you make a mortgage claim. Lenders and mortgage brokers might take advantage of your ignorance and charge you more for poor credit than applicable.
The ABC of credit extends from A to E. These grades are used by loan lenders to estimate poor credit. However, some lenders may have some exceptions and can have different course of action accordingly.
Credit grade A+ to A - would mean credit score of 660 to 670 or above. This means excellent credit. No credit problems from 2 to 5 years and no bankruptcy for the last 2-10years.
A credit grade B+ to B - would mean a credit score of 620. This means no sixty day mortgage lates and 24-48 months since bankruptcy discharge.
Credit grade D+ to D - would imply a credit score of 550. Lots of missed payments. 12 months since bankruptcy discharge.
Credit grade E is a credit score of 520 or lower. This score is for a possible current bankrupt with poor payment record of many 30, 60 or 90 days late.
Poor credit is easy to catch. Sometimes during hard times like job loss, divorce, illness, death you can't keep up with your payments - which leads to poor credit. It is not a bad situation. Mortgage borrowers themselves are not sure if they can get it. There is a separate space for bad credit mortgage online. In essence poor credit mortgage is not very different from the usual mortgage. Neither is finding it.