In simple terms pre-approved bad credit home loan are home loans
sanctioned to poor credit holders, on the basis of pre-approval.
It is worth mentioning in this regard that getting pre-approved
gives you an actual picture of the financial situation you are
in and what your borrowing limit is. As a matter of fact you
can also form a clear idea of how much you'd have to pay every
month if you borrowed as much as you want. There is no denying
that this enables you to decide how much you can safely borrow
and stay out of debt.
If experts are to be believed pre-approval involves the process
of submitting your financial information to your money lender
before purchasing a home. There is no hiding the fact that pre-approved
bad credit home loans make the home buying procedure easy, saving
money and time.
In an ideal scenario to obtain a pre-approved bad credit home
loan, you should first submit a loan application to the lender
mentioning your personal and financial needs. In addition you
also present copies of documents such as purchase agreement,
tax returns, housing expenses, reason for poor credit, bankruptcy
papers, and copies of credit reports. Point to be noted in this
regard is that the lender verifies the application on the basis
of your employment information, financial status, credit history,
liabilities, and assets. Furthermore it is worthwhile remembering
that after completing the application process, you will get
a written document showing the amount, interest rate, and down
payment according to the terms of the lender.
Theoretically speaking there are many lenders who specialize
in pre-approved bad credit home loan.
Fact remained that depending on the lender, you are required
to pay an up-front fee for processing, closing costs, and appraisal.
More often than not closing costs include title searches for
deeds, processing documents, and legal fees.
There is no denying that pre-approved bad credit home loans
have numerous benefits. As a matter of fact once you are pre-approved,
it gives you strong negotiating powers. In addition the required
time period for the pre-approval process varies from sixty to
ninety days.
In case if you have bad credit history and are looking to get
a home mortgage loan, then chances are you are going to need
to know all about how the FICO credit scoring system works.
FICO In an ideal scenario Fair ISAAC & Company is the leading
credit reporting agency that lenders turn to when it comes time
to credit scoring your home loan mortgage application; so if
you do have bad credit history, these guys will know.
It is worth mentioning in this regard that the formula used
by FICO cannot be disclosed because of a decision made by U.S.
Congress. Always remember that there are some things generally
known about FICO that that could help you understand why and
how you can get approved:
1. The common thumb rule in this regard is the higher your FICO
score, the better chance you have of getting that home mortgage
loan. Also, it is worthwhile remembering that the higher your
score, the more room you have to negotiate a lower interest
rate.
2. On the other side of the coin if you have a FICO score lower
than 500, there is very little chance youll be getting a mortgage
home loan.
That said, always remember that if you have a score in the range
of 500 600 you should be able to get a home mortgage loan,
provided you are willing to make a down payment.
On the other side of the coin, if you have score in the range
of 600 640 you should get a 100% home loan financing. You
heard it right, with no money down.
640 - 700: In that scenario you should be able to be approved
for a 125% home mortgage loan .As a matter of fact you should
be able to get an excellent rate with excellent terms.
3. Point to be noted is that FICO depends on each credit report,
so before you apply for a home mortgage loan, if you have bad
credit history, get a copy of your credit report and make sure
there is nothing on there that shouldnt be there. According
to experts if there is, get it changed before you apply for
the home mortgage loan.
4. It is of utmost importance that you wait until after you
have purchased or refinanced your home before you buy anything
additional on credit. There is no denying that more loans or
higher balances can have a dramatic effect on your mortgage
approval, regardless of whether or not you had over a 600 FICO
score before you bought on credit.
5. It is worthwhile pointing that the FICO score is only a part
of your home mortgage loan application, so if at first you dont
succeed in getting your home loan
mortgage, dont give up. Fact remained that some lenders may
still be willing to lend to you!
There is no hiding the fact that people with bad credit often
don't understand how the credit scoring system works. That is
the reason it is beneficial to find out more about it when looking
to get a home loan with less than perfect credit to bad credit
or when dealing with sub prime mortgage lenders.
In case if you are a homeowner in need of a home equity loan
but you have not yet built up any equity in your home, don't
despair. Theoretically speaking a 125 percent equity home loan
may be the answer.
More often than not a 125 percent equity home loan is a second
mortgage loan that allows you to borrow up to 25% more than
the value of your home loan. To illustrate
this point, consider an example, if your home is worth $100,000
and you owe $100,000 on the mortgage, this loan program would
allow you to still borrow up to $25,000.
Other Articles
1. bank car loans
In simple terms all banks lend money to individuals or a group of individuals. But fact of the matter is all thi...
2. home improvement loan
In theory to make repairs or add-ons on your home without having a good credit history, youll need to obtain so...
3. auto loan calculator
According to experts every automobile purchase that is financed involves several decisions regarding the loan am...
|