Does The Very Bad Credit Mortgage Exist

Can you get a very bad credit mortgage loan? Are bad credit mortgages a reality or a fantasy? The fact is, that bad credit mortgages do exist, but very bad credit mortgages are much harder. If you have an abysmal credit report then it is going to be difficult to get a mortgage loan. However, the first thing that you must do before you give up hope is get a copy of your credit report, because while many people think that their credit score is horrible, those that bother to check will generally find that their score and report is better than they expected.

To get a copy of your credit report simply visit www.annualcreditreport.com. This is the official site set up by the credit bureaus to allow you to check your score yearly, a right afforded by the Free Credit Reporting Act. This site will require you to verify your information, and then will allow you to view your credit report online, so that you can determine whether or not there is inaccurate information and exactly what your credit report is. Because when talking about mortgage loans bad credit will not necessarily stop you, but really bad credit will, so make sure that you know what is on your credit report and that you fix whatever you can.

Once you have a copy of your credit report you can determine whether or not your credit report is simply bad or abysmally bad. A good credit score is anything 700 or above. A score of 650 is about borderline for most financing companies and a credit score below 600 is considered poor credit. Really bad credit would be anything below 500. Knowing what is considered bad credit and what is considered borderline will help you determine whether or not that you can go and apply for bad credit mortgage loans now, or whether you should fix your credit report first.

Bad credit home loans are called subprime mortgages because they are higher than the prime rate that you see advertised many times by banks. A subprime mortgage will work with you if you have bad credit, but over the long run you may have to pay excessively for it. The higher interest rate means that you will spend a lot more money over the term of the loan, which is why the finance company is willing to work with those that have bad credit, to take a chance on making the extra tens of thousands of dollars in interest.

A couple of things that you should keep in mind when shopping subprime mortgages is that first, if your credit score falling into the borderline category, then you may be able to qualify for a conventional mortgage at a regular interest rate. Also, you should know that subprime mortgages fluctuate considerably from lender to lender, so that you don’t have to take the first rate that comes along. Shop around and find the best subprime rates. Also, watch out for terms in the contract that are unfavorable to you, that the company puts in to protect themselves from nonpayment, such as a clause that allows them to foreclose after only one missed payment.