How to Qualify for a Home Loan with Less than Stellar Credit

There are a variety of circumstances that can lead to a low credit score. Learn how you can get a badcredit mortgage Arizona and qualify for a home loan, even if your credit is less than perfect.

Bad credit can make you feel like a failure. Many Americans who have bad credit report feeling alone, miserable, and almost hopeless. There is a false picture of a person with bad credit that paints him as irresponsible, reckless, and even as a thief. This could not be further from the truth. There are a variety of factors that can lead to a lower credit score. Job loss, divorce, a sudden change in income, or even an old credit card you forgot about can cause your credit score to suffer. Recent statistics released from FICO Inc. show that 25% of the 170 million Americans with active credit accounts have a FICO score of less than 600. This is considered a low credit score and if you have a low score, you can have trouble getting credit cards, car loans, and even store credit accounts.

If you are one of the 42.5 million Americans with a low credit score, you probably assume that homeownership is beyond your reach. However, with new bad credit mortgage Arizona programs as well as federal programs, borrowers can qualify with low FICO scores.

As with any mortgage it is important to analyze the risks and benefits of a low credit mortgage. Once you have decided to stop letting your FICO score hold you back, it is important to know your options. Most likely you will not qualify for a bad credit mortgage through a bank, so it is important to find a reputable mortgage broker. A broker has more flexibility in terms of types of loans that can be offered so you are more likely to qualify via a broker than a bank.

Types of Bad CreditMortgages

Once you have decided to look for a home loan, you need to do your research. There are a variety of home loan programs available to people with bad credit but they all have different features. Analyzing the risks and benefits will help you choose the right program for you.

One type of loan that is available for people with bad credit is a type of FHA loan. An FHA loan is backed by the government and will allow you to borrow about 96.5% of the value of the home you are purchasing. This means that you won’t have to come up with a large chunk for a down payment. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. You will pay monthly insurance on your loan. In addition to you principle and interest payments, you will also pay a PMI insurance payment. This will increase the amount of your monthly mortgage payments until you pay off 20% of the loan amount. You can also couple FHA loans with different federal programs that offer down payment assistance or cash back at closing like Home in 5. These programs are constantly evolving and changing, so make sure to talk with a mortgage broker about what you may qualify for.

A second type of loan is an adjustable rate mortgage or ARM. An ARM is offered to subprime borrowers who would not qualify for a traditional loan. It offers a low interest rate at first but then resets to a high interest rate after a specified period, usually 1 to 5 years. Once the rate adjusts your mortgage payment will increase due to the higher interest rate. This can be a good option if you only plan on owning the property short term or if you know you will be able to qualify to refinance your loan at the end of your low rate period.

Another type of bad credit mortgage in Arizona that is available is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. This is especially beneficial for people looking to do a fix and flip or short term purchase. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal. It should be noted that hard money loans are short term loans only. They cannot be used to purchase a home you plan to live in for any significant amount of time.

Make sure to know your options for home loans with bad credit.

Once you have decided to stop letting your credit score define your homeownership goals, find a broker to work with. Finding a mortgage broker that specializes in bad credit mortgage Arizona will ensure that you are receiving all the options to make owning a home a reality. 

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.level4funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Bad Credit Home Loans are More Common Then You Think

Buying a house and obtaining a loan from a bank is just one of those events in life that everyone goes through. However everyone also goes through the realities of keeping up a good credit score. And the reality is that you need good credit in order to secure a common mortgage loan from the bank. For some it is hard to keep up a good credit score and unsavory situations can occur unexpectedly. Also poor, uneducated decisions can lead to bad credit. All of these situations hinders the ability to buy a home, buy a car, or buy anything else that often needs credit.

When it comes to buying a house or any other large purchase item, the ability to show that you are a responsible borrower is essential. Just because someone has bad credit does not mean they are irresponsible or lack the income to make monthly payments on a loan. Hopefully there is still a chance that people with bad credit can still get a mortgage with Bad Credit home loans. Bad Credit loans are therefore more common than you may think.

How do people end up with Bad Credit home loans?

Bad Credit home loans are specialized to deal with people who want a mortgage but have a poor credit history. There are many circumstances that can lead to bad credit. People with bad credit may have a missed a few payments in the past or simply have an untraditional job, like a self-employed contractor. These kinds of circumstances hinder a person’s ability to take out traditional loans, especially for expensive items like a house. Without the ability to get a mortgage, bad credit individuals are out of luck when it comes to purchasing the house they want. Without a mortgage, they would have to continue renting or consider a much simpler living arrangement. They would have to qualify for a smaller loan or even pay in cash until their credit is improved. Improving bad credit also could take many years and a lot of patience. Many borrowers cannot wait that long and consider alternative ways of borrowing. The most common method is to apply for a mortgage specifically made for people with bad credit.

What do people do to qualify for Bad Credit home loans?

Because Bad Credit home loans are so common, they are generally easier to qualify for than typical loans. Unlike traditional lending through a bank, a bad credit loan is obtained by a specialized mortgage lender. Specialized mortgage lenders are professionals that help people successfully purchase the home they want. There are no fees or contracts of any kind when you speak with a loan professional. And unlike banks, they are willing to do what they can to get you approved for a mortgage.

Look in your phone or other common news directory in order to find a bad credit loan professional. Be sure to check out their reviews and other reports of their business practices. However if you are looking for an experienced lender, speak to Dennis Dahlberg at Level 4 Funding, LLC. With over 40 years of experience in real estate buying and selling, he knows what it takes to get approved for a mortgage despite bad credit. Call him today at 623-582-4444.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Bad Credit Home Loans- Arizona Best Kept Secrets

            We don’t all have the perfect credit score to qualify for a loan to purchase a home. However, with bad credit loans Arizona residents can’t own the home of their dreams.

What’s part of your ten year plan? No doubt, being able to finally call a home yours in every sense is one of your top goals.  In fact, you've probably already set out in your mind how you’re going to design the master bedroom, or maybe you can envision a big screen television in your man cave. What’s holding you back? Bad credit doesn't have to deter you from making these things possible.

So what are your options? When mortgage lenders review the credit history of a borrower, they tend to look at three things on a credit line; the payment history, how much is owed and the age of the credit line. Late payments, frequently opening and closing accounts in addition to running up credit limits can have a negative impact on a the credit score. When attempting to get an home loan with bad credit you should start by looking for ways clean up your credit report. 

Tips For Cleaning Up Credit Report

Before applying for a mortgage with poor credit it’s important to do all you can to make improvement on your credit. This can be do by:

-          Removing old paid off debts from your credit report. This can be done by disputing claims with the debt buyer or Credit Bureau.

-          It’s common to find errors on your credit reports why is why you should thoroughly search all three of your credit reports for errors before applying for a bad credit  home loan, Arizona has many financial experts that can assist in this process.

-          Trying to pay off as many debts as possible. Make payment arrangements. Also, avoid accruing more debt by applying for credit cards and failing to pay current balances.

Bad Credit Home Loan Options

After cleaning up your credit report as best as you can, you should let prospective lenders know upfront that what kind of state your credit is in. This saves time by preventing the lender from searching into loans that aren't best for your current situation and they’ll be able to let you know quickly whether you will be able to secure a loan with their institution or not.

Depending upon how low your credit score is, you may be able to secure a home loan through a bank. However, you can expect to pay higher interest rates and you may even be required to put down a substantial down payment on the house you’re interested in purchasing. In addition  bad credit home loans Arizona has in place for residents include; sub prime mortgages.

A sub prime mortgage is a special type of mortgage option that is usually offered to people with low credit scores.  Since a borrower with a poor credit history is viewed as more of an higher risk than  the average, banks and other financial institutions charge higher interest at a rate that is drastically different from a conventional mortgage. 

Usually, borrowers with a credit score below 600 can qualify for a subprime mortgage.  Also, borrowers who've filed for bankruptcy within the last few years or have an history of late bill payments are eligible for this type of mortgage. How much of an interest increase can you expect to pay on a sub-prime mortgage?

There is no set general interest rate that lenders charge. However, a subprime mortgage payment is determined by important factor such as:

-          The size of the down payment on the home

-          The individual’s credit score

-          How many delinquencies are stated on the individual’s credit report

-          The type of delinquencies stated on the credit report

Bad Credit Home Loans From A Credit Union

When applying for a bad credit home loan, Arizona residents  have the option of borrowing from a local credit union. Credit unions are nonprofit, community ran financial organizations that provide credit and other financial services to members. If you have a poor credit history,securing a loan through a credit union could be the right move for you. Credit unions are known for their low interest rates and their great customer service. Most credit unions  by law can only charge up to 3 % interest rates or no more than 42% annually.

Credit unions have to protect the interests of all members, so before a loan is approved, the agent will have to make sure that you’re able to make payments on the loan by assessing your current financial state. This means that they’ll want to see how much income you are bringing in on a monthly or yearly basis and they may even want to see how much you have been able to save.

Yes, purchasing a home with bad credit is possible.  Finding the right loaning option will require in-depth research.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix 

Get Approved for a Bad Credit Mortgage Arizona Despite Your Financial Situation

We all know that paying your loans on time is essential if you want to keep a good credit score, as

this is the only way you get another loan or even a mortgage. Credit history is essential when you apply for a mortgage, and this is why you need to ensure that you have a good score. A bad credit will most likely prevent you from getting a new loan since the lenders will fear that you cannot pay.

However you don’t have to worry that much because you can obtain a Bad Credit Mortgage Arizona even if you have a bad credit score, or if your credit history is far from perfect. There are a few ways you can make that happen, and in order to achieve such benefits you need to make sure you have enough cash in reserve. It is best to have enough cash because of a larger down payment that may be required, when applying for a loan with bad credit. Interest rates for loans with bad credit will also have different interest rates unlike traditional loans. However even with these differences, applying for a specialized loan is generally a lot easier and less of a hassle to get approved.

Applying for a bank-approved home loan with bad credit

Before you opt for a standard mortgage loan you should ensure that you check credit reports, as this will help you determine the current situation. Here you can also see if there are inconsistencies or errors, and if that is the case, then you might want to contact the credit company in order to solve the problem.

As a person with bad credit, you do need to expect things such as paying more interest, as banks or other lending institution will consider you a viable person to work with only if they charge you more than usual. In addition, you also do need to show that you have gotten a good job. This shows the bank that you have enough income that will cover all mortgage expenses.

Before you decide to get approved for a typical mortgage loan from a bank, you should try and eliminate all the other debts that you currently have. There’s no way you can receive a standard mortgage if you are still in debt with numerous financial institutions, but if you pay all your debts you do have the chance of getting such a loan. Additionally, if you make a larger down payment, you get a higher chance of having your application for a loan accepted, which is great to say the least! However this is exactly true whenever you apply for a Bad Credit Mortgage Arizona.

If you have a bad credit situation, then within your application you should also try to write down the explanations that bring you all the negative items in front. Tell why that happened and explain the situation, and make sure to say that this particular problem won’t appear again.

What to do if are still not approved for a bank-approved loan due tobad credit

If you are still not able to receive a mortgage despite the advice above, there are other alternatives available that you should consider.

For example there are Bad Credit Mortgage Arizona government programs so you might want to check them out, as they come with a flexible credit requirement that might prove to be helpful. You can also try and look for a cosigner, as this will increase the chances when it comes to getting a much-needed Bad Credit Mortgage Arizona.

The best suggestion however would be to talk to a professional. There are many professionals in the mortgage industry who are more than happy to assist you. At Level 4 Funding we can find the loan unique to your financial situation.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Tel:  (623) 582-4444 | Fax: (888) 279-6917

www.level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Types of Bad Credit Mortgages in Arizona

There are a variety of circumstances that can lead to a low credit score. Learn how you can get a bad credit mortgage Arizona and qualify for a home loan, even if your credit is less than perfect.

If you have bad credit, you can still use a variety of programs to purchase a home. Once you have

decided to seek a home loan, there are several different programs and types of loans available to you. You will need to do your research and choose a loan based on your goals (both short term and long term), and unique credit and money situation.

One type of bad credit mortgage in Arizona that is available is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. This is especially beneficial for people looking to do a fix and flip or short term purchase. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal.  

Another type of loan that is available for people with bad credit is a type of FHA loan. An FHA loan is backed by the government and will allow you to borrow about 96.5% of the value of the home you are purchasing. This can be helpful to many buyers because coming up with 5 to 20 percent of the home’s value can effectively keep some buyers from being able to purchase a home. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. One important note is that you will pay monthly insurance on your loan. In additional to you principle and interest payments, you will also pay a PMI insurance payment. This is basically extra money you pay to help insure against default. PMI payments can range from $80 to over $200 each month, depending on the amount of the loan.

A third type of home loan that may be available as a bad credit mortgage in Arizona is a subprime loan. A subprime loan refers to a loan given to a borrower that represents a greater financial risk due to his/her credit score. A subprime loan is funded by a bank but does not have to meet the same underwriting guidelines as a prime loan. Subprime loans allow access to groups that would normally not have access to the credit market like people with low FICO scores. Subprime loans often have higher interest rates than conventional loans to compensate for their higher credit risk. The most common type of subprime loan is an adjustable rate mortgage.

Why Bad Credit Loans Exist

There are a variety of factors that can lead to a lower credit score. Job loss, divorce, a sudden change in income, or even an old credit card you forgot about can cause your credit score to suffer. Recent statistics released from FICO Inc. show that 25% of the 170 million Americans with active credit accounts have a FICO score of less than 600. This is considered a low credit score and if you have a low score, you can have trouble getting credit cards, car loans, and even store credit accounts.

If you are one of the 42.5 million Americans with a low credit score, you probably assume that home ownership is beyond your reach. However, with new bad credit mortgage Arizona programs as well as federal programs, borrowers can qualify with low FICO scores.

As with any mortgage it is important to analyze the risks and benefits of a low credit mortgage. Once you have decided to stop letting your FICO score hold you back, it is important to know your options. Most likely you will not qualify for a bad credit mortgage through a bank, so it is important to find a reputable mortgage broker. A broker has more flexibility in terms of types of loans that can be offered so you are more likely to qualify via a broker than a bank.

Make sure to know your options for home loans with bad credit.

Find mortgage broker that specializes in bad credit mortgage Arizona will ensure that you are receiving all the options to make owning a home a reality. A mortgage broker will help you understand the ins and outs of each type of loan in more depth and help you find the best loan for your financial situation. A broker will also be able to give you the most up to date information about new state and federal programs that will help put home ownership within your reach. Government programs and incentives change almost daily so make sure that you are working with a broker who knows about any and all bad credit loan opportunities. Don’t let your FICO score stand in the way of owning a home. Reach out to a licensed mortgage broker today.

Level 4 Funding LLC

Dennis Dahlberg, Broker/RI/CEO

NMLS 1058389 AZMB 0923961

23335 N 18^th Drive Suite 120

Phoenix AZ 85027

623-582-4444

www.Level4Funding.com

Subprime Mortgage Arizona: History and Legislation Effecting the Home Mortgage Market

Subprimelending has been the target of many law makers who believe that it represents a predatory lending practice and is unfairly biased against minorities. Knowing the facts about subprime mortgages can help consumers make an informed choice when shopping for home loans.

A subprime mortgage (also referred to as near-prime, non-prime, and a second chance loan) refers to the practice of lending money to borrowers with a low FICO score. Typically a subprime borrower has a credit score less than 640, butthis has varied throughout history.

The most common type of subprime lending is an adjustable rate mortgage or ARM. An adjustable rate mortgage initially offers a very low interest rate, usually below the prime rate offered by a traditional loan. For an informed investor who intends to fix and flip or only own a home for a short period of time, an adjustable rate mortgage can be a great investment tool. However, an ARM is somewhat misleading to uninformed borrowers as it initially charges a lower interest rate. After the ARM period the rate adjusts to a significantly higher rate and higher monthly payment. These types of mortgages were given out frequently by banks to un-creditworthy buyers in 2005 and 2006. Once the loan reset to the higher interest rate, many borrowers were unable to afford their new monthly payments and defaulted on their home loans. ARM were largely responsible for the increase of subprime mortgage foreclosure increases in the mid-2000s.

Another type of subprime mortgage is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal. However, most hard money loans are short term loans and not designed for the purchase of a home that you will own for more than a few months.

Since the recession and housing market crash and subsequent foreclosure boom between 2007 and 2009, subprime mortgage Arizona has become the target of concerned law makers and citizens. Many legislators view subprime lending as predatory lending practice that unfairly penalizes minorities and the poor. They equate subprime mortgage Arizona lending practices with title loans and payday loans. While it is true that subprime loans generally tend to have higher interest rates, they are the same type of loans of opportunity that payday and title loans are. When used responsibly, subprime loans can be a valuable tool for buyers with bad credit scores.

Subprime Lending: Myths and Facts

The first claim by politicians looking to discredit subprime lending in Arizona is that it would unfairly discriminate against low income borrowers. This claim is categorically false. In fact, most subprime borrowers in Arizona are above the median income line. Most subprime mortgages tend to be second mortgages that are purchased as investment properties. Subprime borrowers also tend to own fewer low value homes than traditional mortgage holders.

 Another criticism is that subprime loans are unfairly given out to borrowers who are young without a substantial credit history. Subprime mortgages are not given out to mostly young borrowers. In fact, the average age of a borrower for a subprime mortgage was between 35 and 55 years of age. This indicates that subprime mortgages are not being used to penalize borrowers with insufficient credit history due to age.

A second claim against subprime mortgage Arizona is that minority borrower will be discriminated against and only offered high interest loans. A demographic study indicates that this is untrue. By analyzing zip codes and demographics, it was concluded that subprime mortgages are not more common in zip codes with a Hispanic population concentration.

There is little empirical evidence that subprime lending is detrimental to the lending marketin general or to specific groups of people.

In fact, subprime lending can help allow access into the mortgage credit market for borrowers that would otherwise not qualify for a home loan. If you find yourself struggling to qualify for a mortgage, research your options with subprime mortgage Arizona. Find a broker that can guide you through the process of qualifying to purchase your first home.

Level 4 Funding LLC

Dennis Dahlberg, Broker/RI/CEO

NMLS 1058389 AZMB 0923961

23335 N 18^th Drive Suite 120

Phoenix AZ 85027

623-582-4444

www.Level4Funding.com

Bad Credit Mortgage Arizona: How to Qualify for a Home Loan

There are a variety of circumstances that can lead to a low credit score. Learn how you can get a bad credit mortgage Arizona and qualify for a home loan, even if your credit is less than perfect.

There are a variety of factors that can lead to a lower credit score. Job loss, divorce, a sudden change in income, or even an old credit card you forgot about can cause your credit score to suffer. Recent statistics released from FICO Inc. show that 25% of the 170 million Americans with active credit

accounts have a FICO score of less than 600. This is considered a low credit score and if you have a low score, you can have trouble getting credit cards, car loans, and even store credit accounts.

If you are one of the 42.5 million Americans with a low credit score, you probably assume that home ownership is beyond your reach. However, with new bad credit mortgage Arizona programs as well as federal programs, borrowers can qualify with low FICO scores.

As with any mortgage it is important to analyze the risks and benefits of a low credit mortgage. Once you have decided to stop letting your FICO score hold you back, it is important to know your options. Most likely you will not qualify for a bad credit mortgage through a bank, so it is important to find a reputable mortgage broker. A broker has more flexibility in terms of types of loans that can be offered so you are more likely to qualify via a broker than a bank.

Types of Bad Credit Mortgages

Once you have decided to seek a home loan, there are several different programs and types of loans available to you. You will need to do your research and choose a loan based on your goals (both short term and long term), and unique credit and money situation.

One type of loan that is available for people with bad credit is a type of FHA loan. An FHA loan is backed by the government and will allow you to borrow about 96.5% of the value of the home you are purchasing. This means that you won’t have to come up with a large chunk for a down payment. In addition, the government backing means that you will be more likely to qualify, even with less than stellar credit. One important note is that you will pay monthly insurance on your loan. In additional to you principle and interest payments, you will also pay a PMI insurance payment. This is basically extra money you pay to help insure against default. PMI payments can range from $80 to over $200 each month, depending on the amount of the loan.

Another type of bad credit mortgage in Arizona that is available is a hard money loan. A hard money loan is secured through a mortgage broker but is backed by investors instead of a bank. This is especially beneficial for people looking to do a fix and flip or short term purchase. Depending on the merit of the property you are purchasing as well as potential for income, investors will often invest capital, even if your credit score is lower than what is ideal.

A third type of home loan that may be available as a bad credit mortgage in Arizona is a subprime loan. A subprime loan refers to a loan given to a borrower that represents a greater financial risk due to his/her credit score. A subprime loan is funded by a bank but does not have to meet the same underwriting guidelines as a prime loan. Subprime loans allow access to groups that would normally not have access to the credit market like people with low FICO scores. Subprime loans often have higher interest rates than conventional loans to compensate for their higher credit risk.

Make sure to know your options for home loans with bad credit.

Once you have decided to stop letting your credit score define your home ownership goals, find a broker to work with. Finding a mortgage broker that specializes in bad credit mortgage Arizona will ensure that you are receiving all the options to make owning a home a reality. A mortgage broker will help you understand the ins and outs of each type of loan in more depth and help you find the best loan for your financial situation. A broker will also be able to give you the most up to date information about new state and federal programs that will help put home ownership within your reach. Don’t let your FICO score stand in the way of owning a home. Reach out to a licensed mortgage broker today.

Level 4 Funding LLC

23335 N 18^th Drive Suite 120

Phoenix AZ 85027

623-582-4444

www.Level4Funding.com