Bad Credit Loans FAQ

What is a bad credit mortgage?

A bad credit mortgage is a home loan that is specifically designed for those who have been denied a regular mortgage due to credit problems. A bad credit mortgage can still be used to buy a home, refinance a home, or consolidate high interest debt.

How is a bad credit mortgage different than a normal mortgage loan?

In reality, there is not much difference at all. You still borrow a fixed amount of money with set terms of repayment. The interest rate is usually higher, and some special restrictions are occasionally added. Programs vary per lender, but you can usually choose between the typical fixed interest and the adjustable interest rate mortgage.

How do I know which bad credit mortgage is best for me?

Even thought conventional mortgages offer the largest variety of choices, bad credit lenders offer many choices as well. Your specific circumstances will determine which loan is best for you. Contact us today to discuss the loan programs that best fit your needs.

How much more in interest should I expect to pay for a bad credit loan?

You should expect to have an interest rate that is anywhere from 1 - 5% higher than a typical mortgage for your bad credit mortgage. This means that you will initially pay higher payments, but there is good news. Many loan programs offer the ability to roll into a standard mortgage after establishing a good payment history. In addition, a bad credit loan can be used to repair your bad credit.

How will a bad credit mortgage affect my credit score?

A bad credit loan can dramatically increase your credit score if payments are made on time. A history of satisfactory mortgage payments can show a positive trend of good money management. In addition, a bad credit mortgage can be used to consolidate high interest loans such as credit cards. With the high interest debt consolidated into a collateralized home loan, your credit score will immediately improve.