Arizona Real Estate: Obtaining a Subprime Mortgage Arizona
January 19, 2015Sub Prime Mortgages Arizona: Using an Adjustable Rate Mortgage to your Advantage
January 20, 2015
What’s part of your ten year plan? No doubt, being able to finally call a home yours in every sense is one of your top goals. In fact, you’ve probably already set out in your mind how you’re going to design the master bedroom, or maybe you can envision a big screen television in your man cave. What’s holding you back? Bad credit doesn’t have to deter you from making these things possible.
So what are your options? When mortgage lenders review the credit history of a borrower, they tend to look at three things on a credit line; the payment history, how much is owed and the age of the credit line. Late payments, frequently opening and closing accounts in addition to running up credit limits can have a negative impact on a the credit score. When attempting to get an home loan with bad credit you should start by looking for ways clean up your credit report.
Tips For Cleaning Up Credit Report
Before applying for a mortgage with poor credit it’s important to do all you can to make improvement on your credit. This can be do by:
– Removing old paid off debts from your credit report. This can be done by disputing claims with the debt buyer or Credit Bureau.
– It’s common to find errors on your credit reports why is why you should thoroughly search all three of your credit reports for errors before applying for a bad credit home loan, Arizona has many financial experts that can assist in this process.
– Trying to pay off as many debts as possible. Make payment arrangements. Also, avoid accruing more debt by applying for credit cards and failing to pay current balances.
Bad Credit Home Loan Options
After cleaning up your credit report as best as you can, you should let prospective lenders know upfront that what kind of state your credit is in. This saves time by preventing the lender from searching into loans that aren’t best for your current situation and they’ll be able to let you know quickly whether you will be able to secure a loan with their institution or not.
Depending upon how low your credit score is, you may be able to secure a home loan through a bank. However, you can expect to pay higher interest rates and you may even be required to put down a substantial down payment on the house you’re interested in purchasing. In addition bad credit home loans Arizona has in place for residents include; sub prime mortgages.
A sub prime mortgage is a special type of mortgage option that is usually offered to people with low credit scores. Since a borrower with a poor credit history is viewed as more of an higher risk than the average, banks and other financial institutions charge higher interest at a rate that is drastically different from a conventional mortgage.
Usually, borrowers with a credit score below 600 can qualify for a subprime mortgage. Also, borrowers who’ve filed for bankruptcy within the last few years or have an history of late bill payments are eligible for this type of mortgage. How much of an interest increase can you expect to pay on a sub-prime mortgage?
There is no set general interest rate that lenders charge. However, a subprime mortgage payment is determined by important factor such as:
– The size of the down payment on the home
– The individual’s credit score
– How many delinquencies are stated on the individual’s credit report
– The type of delinquencies stated on the credit report
Bad Credit Home Loans From A Credit Union
When applying for a bad credit home loan, Arizona residents have the option of borrowing from a local credit union. Credit unions are nonprofit, community ran financial organizations that provide credit and other financial services to members. If you have a poor credit history,securing a loan through a credit union could be the right move for you. Credit unions are known for their low interest rates and their great customer service. Most credit unions by law can only charge up to 3 % interest rates or no more than 42% annually.
Credit unions have to protect the interests of all members, so before a loan is approved, the agent will have to make sure that you’re able to make payments on the loan by assessing your current financial state. This means that they’ll want to see how much income you are bringing in on a monthly or yearly basis and they may even want to see how much you have been able to save.
Yes, purchasing a home with bad credit is possible. Finding the right loaning option will require in-depth research.
Dennis Dahlberg
Broker/RI/CEO/MLO
Broker/RI/CEO/MLO
Level 4 Funding LLC
Tel: (623) 582-4444 | Fax: (888) 279-6917
Tel: (623) 582-4444 | Fax: (888) 279-6917
www.level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix