You have bad credit now but probably had good credit when you originally bought your home. Unless you're looking for a cash-out refinance of an ARM (adjustable rate mortgage), chances are you don't want to risk paying higher interest rates on your existing mortgage with a bad credit mortgage refinance. So, what are your options for debt consolidation? Believe it or not, a bad credit second mortgage. Bad credit second mortgages are great for people with bad credit who have a low rate on their existing 1st mortgage.
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Bad Credit Second Mortgages |
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Home Equity Lines of Credit |
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Home Improvement Loans |
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80-20 Home Purchase Loans |
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Fixed Rate Home Equity Loans |
The interest rates for this unconventional loan will be higher for someone with bad credit than someone with good credit. But, they're lower than the 18+% credit card rates. Follow these tips to find out how to go about shopping for a sub-prime mortgage lender and how to rebuild your credit after you get the loan.
- Get a copy of each of your credit reports from the three major credit reporting agencies: Equifax, Experian and TransUnion. To get your free reports online, go to https://www.annualcreditreport.com/cra/index.jsp. AnnualCreditReport.com is the ONLY service authorized by the credit bureaus to provide free annual credit reports under the Fair and Accurate Credit Transactions Act. To request the mail-in form by telephone, call (877) 322-8228. After completing the form, fold (do not staple or tape), place into a #10 envelope, affix required postage and mail to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
- Check your credit reports for accuracy. If you find errors, correct them by disputing the inaccurate items with the credit bureaus. Doing this will provide lenders with a more accurate picture of your finances.
- If, after correcting your credit reports, you still have low credit scores, start shopping for a cash out bad credit second mortgage (also known as a non conforming 2nd mortgage) for refinancing credit lines and consolidating debt.
- Shop around carefully for your loan. Don't be afraid to look online for a sub-prime mortgage lender. Online lenders today carry lower overhead and good loan programs.
- Once you get the loan, pay off your debts but DON'T close the accounts. That could actually lower your FICO credit scores. Keeping them open will lower your debt ratio. According to myFICO.com, the amounts you owe (debt ratio) makes up 30% of your credit scores, so lower debt ratios will increase your scores.
- Use your credit cards sparingly and keep the balances low.
Keep the payments on all your bills, including your new mortgage loan, current. Your scores will increase over time. Then, you'll be able to refinance the bad credit 2nd mortgage for better rates and terms.
- Second Mortgage Refinancing
- Home Equity Mortgages up to $500,000 Loan Sizes
- Bad Credit Second Mortgages with 550 Fico Scores
- 125% 2nd Mortgages with No Net-Equity
- Fixed Rate Sub-Prime Refinancing
100% home equity loans for 1st -time home buyer! Do you need to buy furniture for your new home? Think about consolidating credit cards or taking out cash with our 125% 2nd Mortgage.
80-20 Purchase Mortgages A home purchase loan that offers more options and choices for the borrower each month. Bad credit, late mortgage payments and past Bankruptcies are OK! |
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Looking to finance a new home? Jumbo home Loan. Get approved for a new home loan, regardless of whether you have sold your present home and moved out. Choose from interest only, 100% home financing, fixed interest rates and negative amortization.
Get approved for a 2nd mortgage in just a few minutes and compare several home equity options from All-Star Mortgage Lenders. |
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