By Brian I Park
It is still possible to get bad credit mortgages even with bankruptcy, bad credit, and no credit. It is to the fact that you will not get a good loan compared to someone with good credit.
The interest rates are always based on the credit history, which includes your FICO score. Eventually in this case, you are to pay a higher down payment aside from the higher interest rate.
If you want the cheapest and easiest route, you are required to wait 3-4 years and improve your credit score within that period so that you can apply for a loan. If you can not wait for that long, you have to settle with the specifications of the bad credit mortgages.
In cases where you filed for bankruptcy, the best rate is also obtainable after 3-4 years. Expect to put down a big down payment with an estimate of 20%-30% since the lender wants to make sure that you are financially endowed and that you are fully aware that you would accrue significant losses upon default.
In cases like foreclosure, you may qualify or take chances to apply for an FHA loan right after as little as 2 years aside from the bad credit mortgages. With FHA loans, these require a down payment as minimum as 3.5% so it is really worth to wait for that number of years and gain this low rate. Always keep in mind that your FICO score is the main determining aspect in the interest rates that will be offered to you.
Another feasible option for bad credit mortgages is to rent to own or find a house with seller financing. You would normally pay a higher rent with a proportion of it directing to a down payment.
After a lay down period, you may have to be eligible for a traditional loan if the seller is not financing, which means you are required to meet their terms of the agreement. Otherwise, you would lose all or part of your down payment. For a clearer picture, the seller financing plays the role of the lending agent. This kind of arrangement could be profitable to both buyer and seller since there is no middle men that would drive up the closing costs.
For anyone who would like the best possible and favorable arrangements with complimentary conditions is to wait for about 3 years and continuously improve your credit history and FICO score, which are the main determinants of interest rates or accept the fact that it is still a good thing to consider the availability of bad credit mortgages.
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