The mortgage strategy “less than perfect credit”
The credit report is an important element for a mortgage lender in evaluating the application for a mortgage. He wants to establish the risk associated with each loan application.
The following articles can you
help them better understand the impact of the credit report on mortgages:
Lenders are afraid of what ?
How a lender evaluates your mortgage application? The three important factors to assess risk . 
The importance of the credit report (the character of the borrower)
Strategy”mortgage credit less than perfect”takes place in 3 or 4 steps. The goal is to have your average interest rate on 15 and 25 as low as possible.
Step 1: Have a mortgage
Depend on your credit history, the first step is to have a 3 year fixed mortgage with interest rates as low as possible (even in some cases can
be lucky and have a mortgage at all).
There are several lenders (10 and over) criteria for mortgage financing more flexible. There are solutions for almost all credit situations!
There are two major factors that influence the rate of interest you receive, the most important is your credit score and downpayment.
Step 2 – Correct Your Credit
During the first two years of your mortgage, you will have the opportunity to put your report in good condition. It is important to work with a good mortgage consultant who specializes in mortgages with a less than perfect credit. He can advise you about what to do to restore good credit.
Step 3 – Renew your mortgage with the best rate
With a credit report that is rebuilt, some lenders are willing to offer you a very good rate. He should know properly present your case at the right lender. In some cases where the credit report was very bad, it is possible to do an extra step before you get the best rate.
- Provides a home that will grow in value over time. (See: House prices may still rise? (forecast 2006 and 2007)
- Allows the time to restore its credit.
- Allows for the best rates in the near future.
- The interest rate is often higher for the first 3 years.
- Payments may be higher (it is possible in some cases to keep the lower payments by increasing the depreciation in the first step to reduce it in the third stage)
- Lenders often ask for more paper during the mortgage application.
- The down payment is very important but it is possible to have a mortgage with no down payment in some cases.
- The assessment fee is charged to the customer
- It is not possible to have a pre-authorization but a good mortgage consultant who specializes in this type of file to guide you.
Some mortgage brokers charge additional fees for difficult cases. It is normal that the broker charges fees if the lender does not pay commission or if the loan is less than $ 90 000. In most cases (80% or more) the lender pays the broker a commission.
One should never do business with brokers who:
- Require the payment of their fees before completing the mortgage financing (lawyer);
- Demand high fees (commission 1.8% of the amount financed is normal – at least $ 1,500)
The mortgage strategy “less than perfect credit” ‘can help you get your home now and take advantage of the fact that home prices will probably continue to increase. With a little effort and guidance of a good adviser in less than perfect credit mortgage, you can quickly get good interest rates.