Mortgages With Credit Challenges Can Be Overcome

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This guest article Written and sent by Don @ Bad Credit Lending

There are many people who are paralyzed by the fact they have been labeled as a bad credit risk. Their once pristine credit report now has dealing with payments, and items in collection. Life as they know it has seemingly passed them by. The fact is nearly 5,000,000 homeowners have lost their homes to foreclosure since the housing market was turned upside down in 2006.

That number is expected to climb to over 8 million before this market reset is complete. If you are in this situation and you are determined to keep your home, you will need to contact a number of bad credit mortgage lenders, and explore the options that you have. It may be that your present lender may be willing to modify your loan and the terms of that loan. If you have any equity in your home the chances of you modifying your loan and/or refinancing your loan are much better. If you do not have equity in your home, it will be a little more difficult, but you can still accomplish your goals.Look at it this way, bad credit mortgage lenders exist for one reason. Can you guess what that is? If you guessed that they are there to loan money and write mortgages for persons with bad credit, you are correct.The biggest issue you will face with bad credit mortgage application is reestablishing your credibility with potential lenders. Assuming you have always paid your bills and obligations on time, potential lenders will want to know how you will do that again. They are not interested in your bad debts or credit history per se.They are interested in two things. That is your ability to make the payments on your new loan, and your willingness to do so. What ever else you may have been told, these are the two main concerns with any lender. Lenders simply care about your ability to make your payments, and your willingness to do so.So, how will you convince a prospective lender that you have the ability to make the payments? Obviously, if you have a new job and your salary supports that kind of loan you’re seeking that will help. If you have added income from perhaps your spouse or any other source, then you can document that as well. Anything that you can do to show a prospective lender that you have the resources now to make payments on a loan establishes your ability to do so.There is a second part to that standard. Do you have the willingness to make payments on time to your new lender? Believe it or not there are many people with the resources to make payments on time to their various creditors.For some reason these people choose not to pay them on time. They have no chance at securing a loan. The biggest single source of evidence that you have the willingness to pay your bills and subsequently your new mortgage payments is your history. With an exception of the financial event that occurred in your credit because of unforeseen circumstances or a catastrophic expense in your family, you can show your new lender that you have always paid your bills on time. Your lender will look over your application and consider how much risk you pose to their company or to the lender. It may be that you pay a half a percent or more higher than you would normally pay because of the credit damage your report shows.At the end of the day a half of a percentage point should not make or break the deal for you. After paying on your opinion known for some time it may be possible for you to refinance at a lower rate, should that be a good idea in the future. Remember what we said earlier. Bad credit mortgage lenders are there to make loans to people with bad credit.

Don is a writer at Bad Credit Lending

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