Do you dream of one day owning your own home but your current financial situation makes you wonder if that will ever be possible? If you have a bad credit rating or even worse, have gone through a bankruptcy, then your dream home may be just that – a dream! But it isn’t impossible to get that home, you may just need to look a little harder for a loan and you may need to take a loan that costs a little more, but you do have options with a bad credit loan mortgage. You can still purchase your dream home even if you have a bad credit rating through this type of mortgage.
There are many different reasons why a person develops a bad credit rating and sometimes it can be due to circumstances beyond your control. A bad credit score might be the result of medical bills, job loss or divorce, reasons that are unfortunate and unavoidable, but they can have a big negative impact on your credit history.
When you have a poor credit rating and your only option is a bad credit mortgage then you need to forget about conventional financing and try to get a VA, FHA or USDA loan instead. If the home that you are looking at buying is in a rural area and you have virtually no money to put down on a loan, then a good option for a bad credit loan mortgage is a USDA loan. A USDA loan will often cover 100% of the cost of the home although it isn’t as common as it once was.
Another option is to apply for a fixed rate loan and you can do this through the USDA rural housing program. If you get this type of loan then you may not have to carry private mortgage insurance also known as PMI. If you are a veteran or currently serve in the armed forces then you may be eligible for a VA loan. VA loans are backed by the Veterans Administration so if you are eligible for a VA loan then this can be a good option for you if you have a bad credit rating. A VA loan is generally less costly than a traditional mortgage, particularly for people with a bad credit score. This type of loan cannot be used for an investment property or mobile home but can only be used if you plan on living in the home.
Lastly we have the FHA loan which is backed by the Federal Housing Authority. You are eligible for a FHA mortgage loan even if you have a bad credit history. It is the job of the FHA to assist with bad credit loan mortgages and their aim is to help as many people as possible realize their dream, of owning their own home. The protection that is offered by the FHA will enable lenders to loan money to a person who has very little money to put down on the loan for their home making this a very good option for someone with bad credit and also someone with good credit but that doesn’t have much money saved for a deposit on a home. If you have a bad credit history, don’t think that you have no hope of ever owning your own home because there are options out there available for you. A bad credit loan mortgage is a good option to help you achieve your dreams.