How to Get a Home Loan With Bad Credit
Today, mortgage companies are more strict than ever when it comes to issuing home loans. While banks have their reasons for being strict with their loans, it can be very difficult for many people to secure the loan they need to get the home they desire. While there are a few different reasons as to why banks tend to deny mortgages, one of the most common reasons has to do with credit scores. If you have a bad credit score, chances are the bank is going to deny your application. Or, you may get approved, but with a very high interest rate. However, that doesn’t mean that your dreams of buying a home have to be denied with your application.
While you may not qualify for a traditional mortgage, there are still ways that you can get a home loan, even if you have bed credit. One option is to put down more for your down payment, which would therefore mean you need to borrow less from the bank. However, for most people this simply isn’t a viable option, as potential buyers simply don’t have that much extra cash sitting around.
This is where hard money loans can come in. So many people today struggle to get the home loans that they need, while battling the impact of a low credit score. A hard money loan is not only significantly faster and easier to secure than a conventional mortgage, but it also is a viable solution for those with bad credit. These loans can work great for a primary home or an investment property because the loan is not based on the borrower’s credit score or their income. Instead, lenders who offer hard money loans base the loan on the property itself.
Hard money loans come from private lenders that aren’t affiliated with traditional banks and aren’t traditional mortgage lenders. These lenders look more at the value of the home as the most important determining factor in giving you a loan, not your credit score or current financial situation. They aren’t only just great for those who want to buy a home but have a poor credit score, but they are also a popular solution for those who have had bankruptcies or foreclosures in the past.
In short, these loans are fast, they are flexible and they are easy to get, which is why so many people, particularly those with bad credit often turn to these solutions when they need a home loan. In most situations, you will not be able to get 100% of the property value, but lenders will give you a loan that covers a significant amount of that home’s value, making it easier than ever to get the loan you have been looking for, no matter what your credit score may be.