Getting a bad credit home loan in Washington WA - How does my credit affect my chances?
How does my credit affect my chances of getting a bad credit mortgage home loan in Washington? To answer this question, we have to look at the purpose of credit and credit reports. If someone you don't know came up to you and asked to borrow $150,000 home mortgage loan, what would you say? My response wouldn't just be "no", it would be accompanied with a laugh and a comment like, "Are you nuts?".
Bad credit lenders and subprime mortgage lenders in Washington are in the business of making bad credit home loans but the purpose of making home loans is to make money. When you come off the street asking for a bad credit mortgage from subprime lenders, they are going to say NO because they don't know you. And yet you are asking for a $150,000 home loan. How do the lenders know you will pay them back? The first thing mortgage lenders want to look at is your history of paying back other creditors. This is the purpose of a credit report. Instead of going to each of your previous lenders and asking them for your track record, your previous lenders put their comments in one place - your credit report - for all of your future creditors to see.
Now back to the original question. Your credit affects your chances of getting a bad credit mortgage loan in Washington in many ways. First of all, it is hard to get most lenders to even consider you if you have poor credit. However, there are subprime mortgage lenders in Washington who specialize in bad credit home loans. They understand that things happen that are out of your control or that you used to be a poor payer in your youth but now you are wiser. These bad credit lenders usually concentrate on your past two years of credit payments when making a decision on your bad credit home loan application. If the you have paid your bills on time for the past two years, then your chances of getting approved for your bad credit home mortgage application is better.
The second way your credit affects your chances of getting a bad credit home loan is it puts you in the high risk, or "subprime", category. In general mortgage lenders in Washington like people with good credit because they are low risk. These people get the "prime rate" on their home mortgage loans. That is, they get better interest rate on their home mortgage loans that banks offer. The subprime category is for other people in Washington who have poor credit. Unfortunately, this category includes not only higher interest rates but higher fees as well. But the positive side is that these subprime lenders help people secure bad credit mortgage loans. If not for subprime lenders all doors would be shut on people with bad credit mortgage application.
The final way credit affects your chances of getting a bad credit home loan is through your down payment. Most good credit home mortgages in Washington can be done with very little or no done payment. The industry standard a decade ago was 20%. Now, there are thousands of mortgage loans with no down payment. Alas, the vast majority of them are for people with not so poor credit. Most bad credit home loans require a substantial down payment, around 10% or more. This may not seem like a lot compared to the industry standard of the past, but it is when you compare it to the mortgage loans that people with not so bad credit are getting today. Also, their were very few poor credit home loans available back then.
Credit history is important when it comes to bad credit home loans. However, it is not the only thing to consider. Our mortgage company understands that. We have been successfully serving the mortgage needs of bad credit people in Washington for a long time. In fact, most of our clients hav