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By Carrie Reeder
A few years ago, if you had a bankruptcy or a foreclosure on your credit
report, you could forget about trying to get a mortgage loan. If you were
lucky enough to find someone who would finance you, your interest rate would
be through the roof and plan on putting 10-20% down.
But today, this is not the case. There are many programs available today to
help people who have recently suffered a bankruptcy or foreclosure to get a
mortgage loan or mortgage refinance loan.
There are two things to do if you are in this situation:
Get yourself a free copy of your credit report from all 3 major credit
bureaus, look over everything, do you see any mistakes? Make sure everything
included in your bankruptcy or foreclosure reports accurately on your credit
report. Make sure those accounts involved in a bankruptcy or foreclosure are
not showing something else like collection or charge-off.. That could make
your score much lower than it needs to be. If you have a bankruptcy or
foreclosure, you want everything involved to say so, so it is all under 1
circumstance, instead of many. You can dispute all errors on your credit
report online nowadays. It takes about 15 minutes. You can do it right on the
website of Equifax, TransUnion or Experian.
Once you have checked your credit reports, apply only to places that submit
your application to many lenders. Every time your credit report is pulled, it
will knock your credit score down a little. If you apply to a mortgage
service that will submit your application to many lenders, then you only have
one credit inquiry and can receive offers from up to 4 lenders per application.
Frequently asked questions are:
Will I have to make a large down payment? Not necessarily. If you can get your
credit score above a 600, you should easily be able to get 100% financing,
even if it has been less than two years since your bankruptcy or foreclosure.
If your score is above a 580, you might still be able to qualify for 100%
financing.
What kind of interest rate can I expect? Depending on your credit score and
whether you have any down payment or not, I have heard of situations with a
credit score as low as 585 with no down payment and an interest rate as low
as 7.25%. That was quoted in March of 2005.
Can I get cash out? On a purchase, not likely. On a refinance, depending on
your amount of equity, that is very possible.
There are many lenders now, who specialize in bad credit mortgage loans. These
are the best lenders to start with. To see a list of lenders who specialize
in bad credit mortgage loans, visit: www.abcloanguide.com/
lessthanperfectcredit.shtml (http://www.abcloanguide.com/
lessthanperfectcredit.shtml)
Carrie Reeder is the owner of www.abcloanguide.com (http://www.abcloanguide.
com). Her website offers free information about mortgage loans and provides
lists of recommended bad credit mortgage lenders.
carrie@abcloanguide.com (mailto:carrie@abcloanguide.com)
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