Best Bet Nowadays for a Bad Credit Home Loan May Be FHA Lenders
Once, mortgage brokers were handing out loans like Halloween candy. That bubble burst. Now interest rates for home loans are at an all-time low. Take advantage of the rates with an FHA bad credit mortgage.
Investors and Lenders Had Their Bubble Burst
They were anything but good sources of revenue when it became apparent that most home buyers were not financially qualified for their homes. Many of those loans were variable interest rate mortgages. When the financial market lending rates went wild, so did monthly payments coming due and the amount of foreclosures taking place was unprecedented in the history of the nation. Of course, the bubble burst. Investors were left with bundles of worthless securities. Banks had to be bailed out by the government to protect everyday bank users and their everyday business.
The Good Old Days
Back in the sub-prime days, a 500 FICO credit score was all you needed for home loan. Many got by with faking employment and salary documentation, or lenders just did not ask all the proper questions. For those of us who do not have perfect credit and are looking for a mortgage in the market nowadays, options may seem dim. Once happy-go-lucky banks and credit unions have tightened their lending criteria substantially. Perhaps too tight regarding the dismal economic picture of today.
The Better New Days
Nowadays, mortgage interest rates are at an all-time low and very enticing. But many brick and mortar institutions have raised their benchmarks for approving loans or tightened their standards. Recognizing the market for folks with blotchy credit histories who still want home ownership, other lenders have stepped in to fill the gap in this lucrative market. Many of these lenders can be found online. If you are careful, you can find many reputable lenders online with some very good deals for bad credit home loans. Application is easy, documentation requirements small, time for approval swift.
Federal Housing Authority (FHA) Loans
Most of the housing bubble lenders are no longer in existence because of their risky ventures, so forget them. If you do not want to obtain a loan online, your best bet would be to seek out lenders that are FHA qualified. As with any financial product or service, you need to shop around to find the best interest rates, the lowest fees and the most comfortable repayment terms.
Once in a while, the feds do something right. Although strict Constitutionalists would disagree with the premise and the act, FHA loans are guaranteed by the government. Should you default and the lender have no recourse, the government will buy back the loan at current market rates. This allows home ownership for many Americans who would otherwise not qualify. It lowers the risk for lenders. And repayment terms are standard single interest rate loans with decent repayment terms.
Refinancing Is an Option as Well
If you are already in a home loan and want to take advantage of the low interest rates, look for refinancing with FHA qualified lenders as well. Bargain-hunting homeowners with not-too-perfect credit histories, should look for low interest bad credit home loan refinancing under FHA auspices.
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ABOUT THE AUTHOR
Joycelyn Crawford is the author of this article. For more information about Easy Loans for Bad Credit and Easy Home Equity Loan please visit her site http://www.easyloanforyou.com