Whether you are looking to secure a new home mortgage or refinance an existing mortgage loan, there may not be a better time than right now. Interest rates are at historic lows, and demands for a new mortgage loans are at new highs. While the economy is in recovery and new home sales are on the rise, home mortgage lenders are providing an opportunity to take advantage of these low interest rates.
Lenders are making mortgage loans across the board, from first-time home buyers to home buyers with credit challenges. There are home loan web sites and mortgage brokers available where prospective buyers can enter loan amounts and down payments into a mortgage calculator and find out within just a few seconds what their payments and interest will be over the term of their loan.
Forgiving climate for bad credit
Many families and individuals are hesitant to apply for a home mortgage for fear that their credit scores are not worthy of a new loan. Nothing could be further from the truth. It does not matter what type of loan you need, a personal loan, a secured loan, or a new mortgage; there is one principle that needs to be understood. Lenders need borrowers as much as borrowers need lenders.
The economy has created a new mortgage niche for individuals with less than perfect credit. You should not have any fear of pursuing a new home mortgage loan because of credit challenges. While your credit score is an important component to getting your loan approved, it may not be the most important criterion.
Here is why
Lenders are more apt to lend money to individuals who have a history of paying their bills, despite any negative reports on a credit score. Individuals can encounter circumstances and financial crises unexpectedly, every day. Lenders understand this. Remember mortgage lenders cannot make money if they do not lend money. If you have kept up with your bills in the past, you will have an advantage when you apply for a new mortgage loan.
Lenders ultimately want to know two things about a prospective borrower. One, whether you are able to make the monthly payments based on your current income, and two, whether you’re willing to do so. Forget what you’ve heard about being approved for a loan. These are the most important criteria.
Get ready for paperwork
You may be required to provide more documentation for your new home loan than you have in the past. Home mortgage lenders simply want to know what occurred to cause the blemishes in payments on your credit report. This is simple to overcome by providing an explanation letter to your prospective lender.
If your desire is to own your own home, don’t let market conditions and your credit history be a hindrance to owning your dream home. Home mortgage loans are readily available for those willing to demonstrate some diligence in pursuing them.