Mortgages with Bad Credit History

As home loan guidelines get stiffer and stiffer, more and more people are finding bad credit mortgages as plan A, not plan B as it used to be. But just because you're in the market for a bad credit mortgage loan doesn't mean you shouldn't still look for the best deal possible.

It's best to explore various options when it comes to finding a good rate as these will differ from lender to lender. If you are one with bad credit and looking for a bad credit mortgage loan, know that your rates may depend on your circumstances. This means your flexibility with the mortgage lenders should be at an optimum level. Interest rates may vary according to the circumstances, location, and severity of your bad credit history. Interest rates on bad credit mortgages are likely to be significantly lower than the rates on your existing unsecured debts such as credit cards and personal loans. So this is actually more advantageous than letting such personal debt eat you up.

If you are seeking a bad credit mortgage loan your quest for redemption should start with those mortgage lenders who are more likely to help you. Ideally these lenders should have bad credit mortgage loans within the top tier of their mortgage products. These lenders are happy to help you with a second or third chance. They'll work with you on things such as rate and mortgage insurance.

Above all, do your research. Talk to several lenders. Don't just take one lender's decision as being the only way for you.

Home Loans Without the Big Down Payment

Many people give up on the dream of home ownership before they even get started because they just don’t believe they will ever be able to afford the down payment and closing costs.

A down payment can be as much as 20 percent or more of the purchase price of the house and if you are looking at homes that cost as little as $150,000 you will need to come up with as much as $30,000 just to be approved for the mortgage. Most people don’t have this sort of money sitting in their bank account.

For those thinking these fees would hold them back from home ownership, there is an alternative. There are home loans out there that will help you to get into a home for very little in the way of a down payment and very little in the way of closing costs. Not everyone will qualify for these loan programs, but many people will and many people have been able to buy a home because of them. Why not find out if you qualify?

One of the best home loans for people without a large down payment is an FHA loan. FHA loans are loans provided by a lender but insured by the Federal Housing Administration. These loans allow a lender to provide funding to those who may have less than perfect credit because they are insured against default. These loans are a great option when you don’t have a lot of cash on hand because the down payment can be as little as three percent. When you are buying that same $150,000 home you would be looking at a down payment of $4,500 instead of $30,000. That's a much better deal, and while it still make take some time and effort to come up with the funds, it is much more doable for most people.

In addition to having lower down payment requirements, these loans also have limits as to what can be charged when it comes to closing costs. Many people are not prepared for the cost of closing a loan and they are handed a bill for thousands of dollars and their jaw sort of drops open. It’s hard to come up with these funds and a down payment. When you look at FHA home loans you will find they make closing costs much more affordable. There are also programs out there for you to take advantage of that will help you pay for the closing costs as well as the down payment.

Do your homework when it comes to financing the home of your dreams. You may just find that you can get into that new home for a lot less than you thought.

Reverse Mortgages: Older Homeowners Cautioned

The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years.

The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage — an interest-bearing loan secured by the equity in a home — can jeopardize their financial futures.

With a reverse mortgage, a bank makes payments to a homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out or dies. Reverse mortgages have high fees — typically about 7% of the home's value — and they make it difficult for homeowners to leave the property to their heirs.

The warning notes that, in some cases, those who sell the mortgages may profit from the their sale, giving them twice the incentive to talk someone into a loan they may not need.

Reverse mortgages were originally designed as a tool for aging, low-income homeowners to keep their homes, but they have been used more often by retiring Americans as a way to finance a more-extravagant retirement lifestyle than they could otherwise afford.

Still, as foreclosure rates continue to rise amid the subprime-mortgage crisis, some homeowners who have built up equity in their home may consider reverse mortgages their best option against losing it.

We don't advocate anyone taking out a reverse mortgage… but welcome your thoughts and opinions on it.  Just use the comment link below to tell us what you think about Reverse Mortgages.  Your email address, although required in order to post, will never be published on this site.

Negotiating with Your Lender

You're behind on your mortgage, and you want to save your house. It's time to talk turkey with your lender. But what do you say and who do you say it to?

In this short (1:32) video, Money Talks correspondent Stacy Johnson offers some tips.

Leave any comments you have about this video, or any other tips on things you think should be considered when negotiating with your lender.  Use the comment link below to give us your feedback.

Mortgage Help: Talk is Cheap

With foreclosures and bankruptcies soaring nationwide, both government and private industry have been promising help to homeowners. But is that help materializing?

Learn more about "Hope Now" from Money Talks correspondent Stacy Johnson in this short (1:38) video…

What is your opinion about the "Hope Now" project?  We'd love to hear your feedback.  Click the comment link below and tell us what you think.  Your email will never be published on our site, so no worries about spam issues when you leave a comment with us.