When applying for a mortgage loan when you have a bad credit
history. There are a few things you should know about your FICO
score that will help you know what to expect from mortgage
lenders.
With a credit score below 585, you will need to put at least
10-20% as a down payment on the property. You will not likely
be approved for 100% financing at this point.
If you have a credit score of between 585-599, you will
probably need around a 5% down payment in order to get an
approval for a home mortgage loan. You will still need to get
your approval from a subprime mortgage lender. You will need to
use a lender who specializes in loans for people with "less than
perfect credit" or situations that make it difficult for a
person to get financing for their home.
If you have a credit score of 600 - 620, you will probably be
able to get an approval for 100% financing. You will also, in
this situation, still need to use a subprime lender.
With a credit score of 620 or higher, you may be able to not
only qualify for 100% financing, but be able to get a lower
rate of only 1 - 2 percentage points above the prime rate.
If you have a recent bankruptcy or foreclosure, these estimates
should still be accurate within 2 years after bankruptcy,
repossession or foreclosure. After 2 years, it becomes easier
to get approved for a mortgage loan, because more lenders will
look at financing you after 2 years, whereas many lenders will
not even consider your application until 2 years from the time
of bankruptcy discharge or a foreclosure. After a 3 year mark
from the time of bankruptcy or foreclosure, it becomes even
easier to get an approval, in that many more lenders will
consider your application after 3 years.
For more free-reprint articles by Carrie Reeder please visit:
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