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Friday, January 30, 2009

3 Tips On Getting Approved By 100% Financing Bad Credit Mortgages

Plan On Cash Reserves And Low Debt Ratio

Subprime lenders look at several factors when determining a mortgage application’s status. Credit payment is important, but so are cash assets and income. These two factors can offset late payments or even a fairly recent bankruptcy.

Most lenders prefer to see at least six months of cash reserves for a no-money down mortgage. A low debt-to-income ratio is also critical.

Take Stock Of Your Credit Situation

With poor credit, you can’t afford to have mistakes in your credit report. Before applying for a home loan, go over a copy of your report and make sure all your information is accurate. You can get a free copy of your report online through many sites.

If you plan to secure financing in the next few months, don’t open or close any additional accounts. Such activity will only lower your score – at least for a short time. Instead, focus on spreading your debt across accounts or eliminating it.

Search For The Right Lender Online

There is a wide range of rates and fees charged for subprime home loans. The only way to find the best deal is to search for it online. Broker sites with multiple quotes are the easiest place to start.

Ask for loan estimates that include quotes on closing costs and fees for a “no money down” mortgage. This will give you a realistic picture of loan costs.

However, the problem isn’t so much about getting approved for 100% financing; it’s about getting a decent rate. Be open to all your financing options, including a down payment. Lenders are more than willing to work with your situation, regardless of your credit history.

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