Many people are interested in buying a home after a foreclosure, short sale or some other type of financial hardship – which means that they will most likely have less-than perfect credit. What loan programs are available for people with less than perfect credit? Here are five programs that people can take advantage of who have bad credit.
5 Popular Loan Programs For People With Less Than Perfect Credit
FHA loans have long been popular with people who have less than perfect credit. The mortgage insurance for FHA loans allows lenders to feel more comfortable lending money under less restrictive guidelines because in the event of a default, mortgage insurance is in place. The FHA loan program works with lenders who are FHA approved to loan money to people who qualify under FHA guidelines and are under the current FHA loan limits for the county that the home is located in.
VA loans are designed for active military or Veterans who have served our country. VA loans help those who qualify get into a home with no mortgage insurance and have less restrictive credit score guidelines than typical conventional loans.
Hard Money Loans
Hard money lenders are in the business of loaning money to people without verifying what their credit score is – they just care about the loan to value ratio of the property being financed. Hard money lenders will typically charge a higher interest rate to off-set the risk they are taking on, but they are a source of mortgage loans in todays market for the right people.
Private Money Mortgages
Much like hard money lender loans, private money mortgages are given by a private entity to a borrower. Because these loans often have very high interest, they are typically only used by those with poor credit who are unable to obtain a financing elsewhere.
Bad Credit House Mortgages
Only a few mortgage companies are able to offer specific house loans to prospective home buyers looking to purchase a home, but who do not have the time to wait to build up their credit score. Nationwide makes it easy for you by connecting you with companies that provide high risk mortgages to people with low credit scores. These mortgages will vary in terms of conditions, interest, and other aspects, and those looking to be approved for one of these first time home loans for poor credit should always shop around before deciding on one finance organization over another.
Interested in refinancing or buying a home and possibly using one of these programs? Be sure to talk to multiple lenders who specialize in helping people with less than perfect credit get approved for the loan that will help them. Get started today.Click to See the Latest Mortgage Rates»