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By Sean A. Kelly
If you found your dream home and are worried about your bad credit score affecting your chances of getting a home loan, have no fear, because there are bad credit home loans available. Bad credit home loans are meant for those with poor credit who need to take up home loans to buy a house. These loans are especially for those with financial problems so if you have poor credit, do not give up on eventually buying your own home.
So, how do you know if you have bad credit or whether bad credit mortgages are suitable for you? Well, to find out about your credit rating, you may need to obtain a credit report first. You are entitled to a free credit report every year and you may be able to get a free copy of your credit report from one of the major credit-reporting agencies, listed in the government website http://annualcreditreport.com, once a year. You will need to submit an application for your credit report before the agency sends it to you.
When you get your credit report, you may be able to know all about your payment history, get a complete list of your accounts, know about the balances in your accounts and your payment history for each of the accounts. However, do not confuse your credit report with your credit score, or FICO, that most lenders and insurers use when processing your loan and insurance applications. FICO is calculated based on your credit report and you won’t be able to get your credit score from the government website. You may need to pay to obtain your credit score from a bureau.
If you have bad credit, it may be an uphill battle trying to get various types of loans. Some financiers will require collateral, some may require more documentations to show proof that you are able to repay the loans and some will probably impose a high interest rate for the loan. Bad credit loans are widely available nowadays for consumers who are having a hard time in getting funding just because they have a poor rating. It is the same with mortgages. While there are regular home loans with adjustable or fixed interest rates, there is also a wide range of mortgages for consumers with poor credit score
A mortgage for consumers with bad credit is rather similar to a regular mortgage. You will still be taking a loan of an agreed amount of capital and you will need to pay back the lender with an interest rate added to the capital. There are also various mortgage products you may choose from. The only difference may be that bad credit home loans may have a higher interest rate compared to the regular mortgages. Also, the lenders may also be placing more restrictions on the loan and apply additional terms that you may need to fulfill to qualify for the loan.
Therefore, it may be important that you seek third party help when seeking a home loan to suit your particular financial situation. If you talk to a specialist mortgage advisor, you may be able to get sound professional advice on the types of loans that are suitable for you, whether you are looking for a mortgage or a home equity loan. The specialist mortgage advisor may be able to look into your financial situation and make the proper recommendations while providing you with accurate information you may need. When you seek help, you may also get assistance when filling up the application forms which could be rather complicated and confusing.
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