Most of us think
that many Americans are settled as to where they are living, but the truth is
most of them want to live in Texas. With a wide range of places to choose
from, why would they want to settle in Texas? They choose Texas because of
the following reasons:
- It has a nice sunny weather and mild winters
- It is very rich with theater productions
- The place has maintained its cleanliness
- There are so many shopping centers, malls, and restaurants to shop and
- And the landscape provides a lot of outdoor activities for the whole
Texas has been everyone’s dream place to build a home. However
despite the reasons above, some people could not reach their goal of moving to the
sunny state of Texas because of their bad credit.
Bad credit is a description of a person’s failure to keep up with their
credit agreements and their incapacity to be approved for a new credit. They
call it bad credit when it happens several times, which is the same with bad
credit mortgages. The only difference between types of mortgages, are higher
interest rates and charges. People with bad credit are individuals with the
- Bankruptcy in less than 2 years
- Foreclosure within the last 3 years
- Low credit scores that are below 620
But luckily for those who want to live in Texas with bad credit,
there are some lenders that have the ability to approve an Texas mortgage for
bad credit. This can help borrowers with low credit score loan a home even if
their credit is less than perfect.
Hard Money Loan
These types of loans are usually offered by groups of investors and not
the bank. This can benefit new homeowners who are looking for a short-term
purchase. Since the lenders are investors, they are more likely to give loans
to borrowers with low credit scores. However, hard money lenders can qualify
for a loan amount based on the value of the real estate that is used as
collateral. The biggest loan borrowers can expect from their lenders would be
65% to 75% of the property value. For example, if the property were worth
$100,000, the lender would probably advance 65% to 70% of the property value.
This will provide the lender added security if ever the borrower does not pay
and they have to foreclose the property.
This is another type of Texas mortgage for bad credit loan where the
loan is backed-up by the US Federal Housing Administration mortgage insurance,
which is provided by an FHA-approved lender. This allows first-time homebuyers
and current homeowners to buy a home with less than a 3.5% down payment. Great
news for borrowers without a large amount of cash assets! With the government
insuring the loan, borrowers end up paying PMI or Primary Mortgage Insurance,
which can range from 80 to a few hundred dollars. Using PMI will slightly
increase the borrower’s monthly mortgage payment. However they are only
entitled to finish this payment until they have paid off 20% of their home
This loan is given to borrowers who are having a hard time maintaining
their payment schedules due to unemployment, divorce or medical emergencies.
This loan is characterized by the following: poor quality collateral, higher
interest rates and with less-favorable terms to pay off higher credit risks.
So, what are you
waiting for? Texas is just a loan away from you and your family. With all the
types of Texas mortgage for bad credit
listed above, you can choose the right
one for your individual needs. Even with a bad credit, your dream of having a
home can come true.