Where can I find a mortage company who will loan money to people with poor credit? Trying to repair credit.?

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  • W. E
    Lv 5
    1 decade ago
    Favorite Answer

    Do you have any idea what your middle credit score is? For 100 percent financing you would need 580+ (and some lenders are now raising their limits up to 600 middle score) with all the forclosures happening. If you have a lower credit score, you can do a 90/10 or a 80/20 with a seller doing the seller 2nd for the difference. What you need to do is talk to a Broker (sorry, but a bank will not talk with you unless your credit is higher), but a Broker deals with lower credit and trys to find you the best rate and program for you.

    Here is some addition informaton, hope it helps.

    There are other factors to consider, besides credit. Medical Bills are Over looked buy underwriting (since medical is a unforseen event), where as credit cards, are looked at (since you purchased items on a credit card.) Also, Job time of 2 years, Rental history for 2 years is looked at. What collections & judgements are on your credit report. Some collections may not have to be paid off. Judgements may need to be paid off - depends on the Lender and Their Underwriter. All of these are taken in as a factor on getting a home loan. Credit can be worked on, by adding alternative credit. If you are paying regularly on a cell phone, auto insurance, rent, etc - these are called alternative credit.. All is not HOPELESS - ok - take a deep breath. If your credit score is 500 or higher, anything is workable, with a seller second - etc the higher the credit score the better. Lenders look at the middle score...of the 3 scores. If you only have 1 score or 2 scores (have seen it), it is still workable....but unless a lender sees the whole picture - credit - income - job time, etc - than you will not have a "true" picture of what you can afford - Hope this helps - There are also Government programs out there, but they too are looking for job time, etc.

    A 100 percent loan - is not totally out of your reach - There are FHA programs, payment assistant programs to help you. Look at your middle credit score, if you do not know your credit scores - have your lender tell you, or pull your credit from the 3 credit reporting agencies - BUT the person you are working with should tell YOU.

    Lenders look at the middle score to qualify a person - With a 580 or higher you can get a 100 percent 1 loan. If your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are alot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher.

    If you go with a FHA loan, FHA has MI included. (With a 580 + you will be going sub-prime the rates are higher by about a 1 percent, but you have no MI. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is not the same as Home Owners insurance, ok) VA loans do not have MI insurance.

    Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are a lot of factors involved.

    With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true....

    Go to these websites

    http://www.nehemiahcorp.org

    http://www.fanniemaefoundation.org/...

    http://www.fha-home-loans.com/

    Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

    How To Improve Your Credit

    . If you have had credit problems, be prepared to discuss them honestly with a mortgage professional. Responsible mortgage professionals know there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties. If you had a problem that's been corrected, and your payments have been on time for a year or more, your credit may be considered satisfactory.

    If you are currently in excess debt, there are four ways to control it:

    . If your credit is not in terrible shape, you can reduce your other expenses, even if it means making hard choices or changing your lifestyle to fit your income. Consider selling a second car, taking equity out of your home, applying for a non-secured signature loan, obtaining a loan from a relative, selling your home and paying off your debts with the proceeds and then renting, cashing out your 401K/retirement benefits or selling family heirlooms, jewelry, etc.

    . If your credit is already damaged or one of the above isn't an option, go through Consumer Credit Counseling Services (CCCS). Check your yellow pages for the local number. CCCS may be able to help you pay off your debts as if you were in a Chapter 13 bankruptcy, but you don't actually file for bankruptcy. BUT MORTGAGE LENDERS LOOK AT A CCC AS A BANKRUPTCY.

    . If CCCS won't take you, you may want to consider bankruptcy. Claiming Chapter 13 bankruptcy takes longer than a Chapter 7, but your credit will end up in a little better standing. Chapter 13 bankruptcy gives you up to 5 years to pay off your debts. The disadvantage is that you're in bankruptcy for up to 5 years plus your credit report shows your bankruptcy for 7 more years after you have finished paying off your debts.

    . If you are so far in debt that you can never repay it, then the best solution may be a Chapter 7 bankruptcy. A Chapter 7 bankruptcy is the least desirable from a credit standpoint, but you are typically out of bankruptcy in 6 months and you don't have to repay any debt. The disadvantage is that this shows on your credit report for 10 years from the date of filing your bankruptcy. Creditors are starting to tighten their credit requirements, and you may have a tough time getting future financing.

    If you're debts are under control now, but want to improve your credit history, the most important factor is to make your monthly payments on time. Use pre-addressed envelopes enclosed with your statements to mail your payments and call the company if you don't receive your usual statement. Also send your payment as early as possible if you carry a balance. Most companies calculate interest on a daily basis, so the sooner they receive your payment, the less interest you'll pay.

    Don't procrastinate. It's the day your payment is received that counts, not the postmark date. Give the post office sufficient time (five business days is a good guideline) to deliver your mail. Late payments may mean late fees, higher interest, and/or a negative mark on your credit report.

    Never send cash. Open a checking account if you don't have one, or spring for a money order and keep your receipt. Finally don't forget to tell your creditors your new address when you move.

    If you are worried about making payments, make a list of your debts and when the payments are due. Contact your lenders immediately if you think you will have trouble meeting the monthly payments to arrange a payment schedule.

    Taking money from your retirement account or tapping the cash value of your life insurance policy to pay bills or living expenses may have serious implications you haven't considered, so try to get advice from an expert before you take any major financial actions.

    Credit cards can be invaluable in a crisis, since they allow you to charge items and pay them off over time. But they can also be dangerous if you aren't careful and charge more than you can afford. If you do use credit cards, choose those with the lowest interest rates and pay them back as soon as you can to cut your costs.

    Credit Scoring - How it Works

    . Credit scoring is a statistical method that lenders use to quickly and objectively assess the credit risk of a loan applicant. The score is a number that rates the likelihood you will pay back a loan. Scores range from 350 (high risk) to 950 (low risk). There are a few types of credit scores; the most widely used are FICO? scores, which were developed by Fair Isaac & Company, Inc. for each of the credit reporting agencies.

    Credit scores only consider the information contained in your credit profile. They do not consider your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status. Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score.

    Different portions of your credit file are given different weights. They are:

    35% - Previous credit performance (specific to your payment history)

    30% - Current level of indebtedness (current balance compared to high credit)

    15% - Time credit has been in use (opening date)

    15% - Types of credit available (installment loans, revolving and debit accounts)

    5% - Pursuit of new credit (number of inquiries)

    The most important factor for a good credit score is paying your bills on time. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you may want to: keep balances low on credit cards and other "revolving credit;" apply for and open new credit accounts only as needed; and pay off debt rather than moving it around. Also don't close unused cards as a short-term strategy to raise your score. Owing the same amount but having fewer open accounts may lower your score.

    Recent changes minimize the negative effects that rate shopping can have on a mortgage applicant. If there is a consumer originated inquiry within the past 365 days from mortgage or auto related industries, these inquiries are ignored for scoring purposes for the first 30 calendar days; then, multiple inquiries within the next 14 days are counted as one. Each inquiry will still appear on the credit report.

    Every score is accompanied by a maximum of four reason codes. Reason codes identify the most significant reason that you did not score higher. The reason codes can help a lender describe the reasons for higher than expected rates or loan denial. Scores are not part of the credit profile and are not covered by the Fair Credit Reporting Act.

    Your credit report must contain at least one account which has been open for six months or greater, and at least one account that has been updated in the past six months for you to get a credit score. This ensures that there is enough information in your report to generate an accurate score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.

    Source(s): Wanda Ellis, Branch Manager Charterwest Mortgage, LLC
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  • 1 decade ago

    There are many mortgage companies online that will loan money to people with poor credit but if your middle credit score isn't over 500 noone will help you and if its that low you will end up with a high interest rate and a 90%LTV loan meaning you will have to put 10% down. The best way to try and repair your credit is to get copies of your credit from all 3 bureaus and start disputing items that are incorrect and continue to pay all your current bills on time. Unless you have money for downpayment and closing or assistance from a downpayment program I would work on my credit before buying a home. If you can get your credit scores up to at least 550 I know a mortgage person who could get you a 100%LTV . good luck

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  • 1 decade ago

    There are many as you will see. You want to take your time and improve your credit and this can be done in as little as 3 months working with an experienced loan professional. Ideally having your credit above 620 is best too. Also you should try to save about 2 months worth of your anticipated mortgage payment.

    I am willing to assist you if you like.

    Source(s): WWW.Intermountianhomeloans.us Dave Card, Loan Officer
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  • Anonymous
    1 decade ago

    Premier Mortage (386)248 3955

    Hayes Mortage (386) 673 2400

    MoneyTree Mortages (800) 447 9499

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  • 1 decade ago

    I know that you might have been told this is the way to repair your credit it is NOT..................

    Someone will give you a loan BUT they will hammer you on interest rates and most of the time it is on a 2/1 arm which means the interest rate you get NOW will bear NO relation to your actual interest rate in TWO years time.........ie it will be double maybe treble what the interest is now............

    PLEASE look at really working on imprving your credit for the next four years..............and at the same time put as much as you can to savings and then look around at applying for a mortgage...........wouldn't you rather have THEM offer you stuff than you having to TAKE whatever they FEEL like offering you

    Good Luck

    Source(s): sorted out our credit after divorce took 3 years got a GREAT rate and lovely house.
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  • N3WJL
    Lv 5
    1 decade ago

    If you're credit is bad the last thing you need is more debt. You're just asking for trouble as the only loan you'll get will be very high intrest rate. Just chill and rent for awhile.

    Why does everyone think they need to own a house when they have no money!

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  • kate
    Lv 7
    1 decade ago

    Check the yellow pages for companies in your area but expect to pay a really high rate. Better to hold off the purchase as home prices are dropping and you will get a better rate after the credit improves. It will be a big difference because mortgages are for LOTS of $$.

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  • ?
    Lv 4
    4 years ago

    there are a number of steps you ought to use to sparkling up your credit. the only element that i might advise is to pay your costs on time and then start to pay of the main up-tp-date debt you have. Paying of the present debt is extra valuable in raising your credit than paying off debt that has been their for a pair of years.

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  • Anonymous
    1 decade ago

    Well will help you repair your credit and get you approved for a loan. We are a bank not a broker http://wtemortgage.com

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  • Anonymous
    1 decade ago
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