Bad credit mortgages have always been available. Before the recent credit crunch they were known as "hard money" loans because they were based on the property, not the borrower.
In the days of easy money, just a few short months ago, there were many lenders available who would make "bad credit loans" to borrowers with fico scores as low as 500 or lower.
Now that the sub-prime market has essentially disappeared, what’s old has become new again. Bad credit mortgages once again flow to the hard money lenders. Now, however, even hard money lenders are asking to see paystubs or other forms of verification to prove that the borrower really has the ability to repay the mortgage.
Since there are still many people with less than perfect credit, there is a market for bad credit loans and many Internet lenders are still trumpeting those kind of loans, hoping you will apply and that maybe your credit isn’t as bad as you think it is and they can make a loan. The next thing you hear from them is the "loan request declined" form in the mail.
We’re on thin ice here, because we are also dedicating this page to bad credit mortgages, even though we know the pool of investors to fund bad credit mortgages has almost dried up.
We want to take this discussion one step further, however, by talking to you about the options.
The first option is one that we make available on this site. It gives you the ability to order your own tri-merge credit report. There are 3 points of extreme value here:
- The tri-merge is the exact same report the lenders use to evaluate your credit. You can get it first and know exactly what the lender will be looking at BEFORE you submit a loan application.
- The report we recommend is available for a low, one-time fee, as opposed to those companies that only give you a report if you sign up for their monthly monitoring service. This saves you money.
- The report we recommend comes with an analysis showing you the steps you can take to improve your credit score. After all, why pay too much for your money if you have a chance of raising your score and not being a bad credit loan applicant.
The second option is that we can refer you to many agencies that can help you improve your credit score. We are not in that business, but we know companies in that business and would happy to give you some referrals.
To us it seems that either or both of these options are better than a collection of decline letters from applying at lender after lender. We hope you agree.
If you have questions about bad credit loans please contact us and write "bad credit loans" in the comments.
