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Bash me against the wall - my Credit Score Under 500

Topic: Mortgage

I can't even expect to get a loan. But I really, hardly want to get mortgage!

And I get - a hard equity loan, so called because it is based on the equity remaining in your home instead of your personal credit. If you do require a mortgage loan with a credit score under 500, more than likely you will probably be seeking an equity based lender. Since loan companies assume that customers with sub-500 credit scores have more difficulty in paying back their loans, the ratio of the monthly payments to monthly income is another factor in play.

Your credit score determines whether you will be, approved, declined, required to place a large down payment, or have to obtain good or very unfavorable terms for not only mortgages, home loans and cars, but for a variety of other things as well. Lender banks consider mortgage payment "lates" much more severe than credit card late payments, and punish homeowners with mortgage "lates" accordingly with higher interest rates and/or lower loan amounts. Most lenders out there will not accept loans with scores below 500. With credit scores below 500, a loan applicant must have positive compensating factors in other areas. For example, do you have only unsecured credit loans (high risk), or do you also have some solid secured loans such as mortgages and automobile loans.

Applicants with credit scores below 500 may still qualify for a mortgage if they have enough equity or a large down payment. So, if your home has equity you will be in a better position to obtain such a loan regardless of your payment history. If your score is in the low 500's then chances are an interest only payment is not an option. In other words, he needs to prove that he has high income relative to his debts and that he has a bigger down payment. For that reason, it is usually best to try to bring your score up, either on your own or through a credit repair company, before obtaining a mortgage. Additionally your mortgage professional can advise you on how to improve your credit score.

Can I refinance my home with bad credit. Having a credit score under 500 means that you will not qualify for a conventional mortgage refinance, however you may qualify for a hard equity loan, so called because it is based on the equity remaining in your home instead of your personal credit. Even though you may have below 500 credit scores, with a good mortgage payment history you may be able to refinance and pay off some of the negative debt on your credit report. Before you know it, your credit profile will have greatly improved and you will be able to refinance into a much more attractive mortgage program. Therefore, you can see how credit and credit scores can play an important role in your life and with bad credit it can force you to pay higher interest rates, higher payments and higher premiums on numerous different items.

Your credit score is a large determining factor in the interest rate you will receive on your mortgage, and therefore the amount of your monthly payments. If you do have derogatory credit or late payments in your credit profile, the more recent the late payments are, the more negative the impact will be on your credit score. However, obtaining a mortgage and making the payments on time is perhaps the best and quickest way to raise your credit score.

How can I improve my credit score. One of the main ways to improve your credit score is obviously to pay your bills before they become 30 days or more past due. You can improve your scores by paying down the balance on the credit cards where the balance is at or near the high credit limit. Dispute any inaccuracies, and this alone sometimes improves your credit score. When disputing an item in your credit report, be sure to dispute it with all three credit bureaus, because reversing a negative item with one credit bureau does not improve your score with the other two. If you are trying to establish credit to improve your score, getting a secured credit card from a local bank or credit union can establish credit history and be reported as a tradeline. A good mortgage broker can offer advice and may even be willing to assist you with your credit and trying to improve your credit scores. Therefore, contact a personal mortgage consultant to discover what your options are and to map out a plan to improve your credit situation and get the financing that you need. You make investments in your future, so any dollars you spend to credit repairs will come back to you in the dollars you save month to month with your newly improved scores and available interest rates.


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No, buying a home is still just as easy today as it was last year for pelope that REALLY qualify.With a 20% down payment it sure makes it easier.But it's more than just your score Your income has to support the new payment and your current debt load. This is called Debt-To-Income ratio. Lenders have their own guidelines, so you may not qualify with one lender, but might with another, but everything is risk based, which means the higher the risk, the higher the rate.We would have to look at ALL the pieces of your puzzle to see if we could make the picture(transaction) fit together.The easiest thing to do is to get pre-qualified, it doesn't cost you a thing, and then you won't have to worry about What ifs .You would know I would definately work with a broker if you think you have Issues , they typically have non-traditional lenders in their portfolio that entertain non A-paper deals, where as a bank can only lend THEIR products, so if you were turned down at your local bank, you may get approved with another lender.Good Luck
read more... 05/01/2012

If you've already got bad creidt, you may not be able to purchase a home except at a high interest rate. If your score is REALLY low, you probably won't be able to get a loan at all.However, if you do get a loan and make all of your payments ON TIME, yes, it can help your creidt score.A mortgage lender is going to look at your score before they approve a loan though so you have to have a high enough score in the first place.If you want to improve your score, the two things you can do that will help the most are paying bills ON TIME, and paying off debt. That means all your creidt cards need to be under 30% of the total creidt limit you have on them. Don't charge more stuff. Pay them off. Make more than the minimum payment due on creidt cards. Always making the minimum payment never really gets you anywhere. You'll be in debt for the rest of your life making minimum payments.
read more... 05/01/2012

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