There is an option to obtain bad credit home loans for those who have poor credit history and even for those who have filed bankruptcy. A few suggested guidelines just need to be followed.
It is easier for those with bad credit history to obtain a mortgage or any other type of loan. An individual debtor may obtain credit reports from any of the three bureaus - Equifax, Experian, and Trans Union. The reports are based on different factors. The most important of which is the actual credit history based on all credits and loans.
The reports must be studied carefully. Any part of the reports which appear doubtful or unscrupulous should be challenged. This may improve the overall credit score of an individual.
Despite a bad credit score, a traditional home loan may still be possible in some instances. There are creditors which approve loans amidst poor credit standings. These include non-conforming lenders, subprime lenders, and hard money lenders.
Non-conforming lenders provide loans without requiring an outstanding credit history. Hard money lenders on the other hand offer solutions to debt issues which need to be immediately taken care of. Hard money loans can be described as a quick fix.
Hard money lenders can provide bad credit home loans six months after filling bankruptcy. As for those who had experienced a foreclosure of properties, the Federal Housing Administration or FHA allows two years from the date of foreclosure. This of course does not weigh much with hard money lenders as well as non-conforming lenders.
Subprime lenders also approve loans for those with bad credit history including those who had filled bankruptcy and had gone through a bank or financial institution foreclosure. Subprime lenders may also accept clients who were previously declined by major lending groups.
The only problem with these types of loan sources are down payment requirements and interest rates. Down payment needed may start at 20% to as high as 35%. Interest rates may also be higher than what is imposed by conforming lenders. The terms and conditions embodied within the loan may not be favorable as well. Penalties and other fees may be collected too.
For those who wish to wait until they are qualified for a conforming loan, four years after bankruptcy is the best time. As mentioned earlier, two years after a property foreclosure is the standard period as well based on the guidelines of the FHA.
While waiting for these periods, a debtor can begin to rebuild credit history again. Start from the bottom and work one’s way up. An application for a basic credit card will do. From here on, compliance to payment schedules must be followed. Keeping a consistent employment with regular wage earnings also helps. One can move up to a higher type of credit card after at least six months.
In case bad credit home loans do not offer feasible options for debtors, another way to acquire a house is through land contracts with financing. These do not have qualifications like lenders do, have interest rates, down payments, and payment terms which are easier and lower.
Once you have qualified for a loan, you may browse through El Dorado Hills Real Estate California properties through Dameri and Trexler.