How To Get Approved For A Mortgage With Terrible Credit
This applicant represents a pretty typical situation that many consumers find themselves in. They want to know how to get approved for a mortgage with terrible credit rating. They find themselves in this situation due to the fact that they missed payments on several credit cards and utility payments. This occurred several years ago and they are surprised to find out that they are still having difficulty getting approved for a mortgage.
Most consumers do not realize that once your credit rating is downgraded it can take several years to improve it. It is not just time that is required, it is also demonstrated payment of all bills on time all the time that must be completed. In the past two years they indicate that they have paid all of their bills, and have never missed a mortgage payment. They appear to be getting their act together from a financial perspective and most likely are better than their credit rating shows.
All things considered, they should be good candidates to remortgage their home from $300,000 up to $425,000. They have good jobs and have been at these jobs for sometime. They make sufficient income to carry the monthly payments.
Unfortunately at this stage they will need to find a lender who is willing to take a chance on them and provide them with a new mortgage on their home. Based on their credit rating, they will pay an interest-rate penalty compared to someone with excellent credit. Lenders look at the ability of applicants to not only carry the monthly mortgage payment, property taxes but also utility payments. They want to make sure that there is sufficient income for applicants to meet all the requirements and still have a decent quality of life.
In addition to having difficulty in finding a lender willing to work with them, they will also have to pay the penalty of higher interest-rates and possibly insurance fees to go with it. This is the cost of missing payments and having a terrible credit rating.
Over the next couple of years, assuming that they meet all of their monthly obligations, their credit rating will gradually improve. They will have a decision to make. Should they go ahead with the current mortgage proposal that may be offered to them which will include an above market interest rate and fees? Or should they wait another year or two and then reapply for a mortgage, assuming their credit rating has improved. With a better credit rating there will be more lenders willing to lend money at more competitive interest rates. This is the dilemma that many consumers are facing today who have allowed their credit rating to fall.
DEFAULT LOAN APPLICATION FOR BORROWER’S INFORMATION
Home/Mortgage Loan Amount :: $425,000
Home Loan Application and Processing Speed (when do you need the funds):: we are trying to qualify for a mortgage so we can purchase a home. We just need $425,000!
Do you currently have a mortgage? :: no, we are currently renting
What City/Town, State and County do you live in? :: Long Beach, California
Zip :: 90802
What is your employment field? :: I work as a mechanic and my wife works as a dental hygienist.
Employment Position :: auto mechanic
When are you paid? (monthly/weekly/biweekly):: byweekly
Your credit rating to be – excellent, fair, or bad? :: the last lender I spoke to told me I had terrible credit
How did you find us? :: searching online for a mortgage with terrible credit
How are you paid? (direct deposit/paper check):: direct deposit
Gross Amount Per Paycheck :: $1850
Do you agree to have this information published online, without your PRIVATE information of course? :: sure, although my wife is really concerned about privacy
Extra information here please (some detail):: My wife and I are looking to renegotiate our mortgage. We have an existing mortgage of $300,000 and would like to bump that up to $425,000. The extra $125,000 would be used to repay some of our debt on our credit cards, a car loan and do some renovations around the house.
The majority of the extra funds will be targeted towards renovations. This is something we would like to do this year however if we cannot get a decent interest rate and mortgage, we may decide to defer the renovations.
We believe that our house is worth approximately $600,000 so there should be lots of equity to support this new mortgage. We have had our home appraised by a real estate agent and that’s why we feel the house is worth what it is.
The problem is, that we have a very bad credit rating. We are worried that lenders will look at that credit rating and not approve us for the mortgage that we are looking for.
Note to Lender ::
We have never missed a payment on the mortgage. We are in good standing with our current lender however they are not willing to increase our mortgage at this time. We’re not sure whether it is because of our bad credit rating or they just don’t want to take on more business from us.
Our terrible credit rating stems from the fact that we did not make all of our payments on a couple of credit cards and we missed paying some utility bills. These were reported to the credit rating agency and they downgraded our credit rating. This occurred several years ago but we’re still paying the price for making that mistake of missing payments.
I work as an auto mechanic and have been at the same place for several years. There is no shortage of work and I keep myself up todate with the change in technology. I can pretty much work anywhere although I prefer the company I’m currently with.
My wife works in a dental office and has been there also for several years. Neither of us anticipate changing jobs at this time and have a really good reputation with the companies we work for.
We would like to move on from the terrible credit rating that we have. We have not missed any payments in the last two years and as I mentioned earlier we’ve never missed a mortgage payment. Do you think that you can assist us in finding a lender willing to upgrade the mortgage on our home?