If you've decided to buy among Rancho Santa Fe homes for sale, but you have a credit report that is not perfect, you may still be able to do so by getting bad credit loans. These are intended for buyers who have credit issues and allow them to purchase a property even if they have a bad credit. Such problems include the following:
- Credit scores below 620
- Foreclosure within the previous four years
- Bankruptcy within the previous three years
- Late payments of 30 up to 90 days in the previous two years
- Liens, judgments, or collection accounts
Technically, bad credit loans are known as sub prime mortgages. Lenders are at a higher risk due to the borrowers' previous credit history; but because of this risk, the lenders have a higher reward: higher mortgage rates.
These loans permit borrowers to get a mortgage when they have been rejected by traditional banks or lenders. Its concept is to give them another chance to attest their credit merit and then refinance the mortgage in time after they establish a perfect credit record for a minimum of two years.
Bad credit loans have many mortgage terms that borrowers can avail. Some of the basic terms are listed below:
- Loan amounts from $75,000 to $2,000,000
- Various loan programs including 80 / 15 / 5 and 80 / 20; adjustable rate mortgages; fixed rate mortgages; and 2/28, 3/27, 5/25 and 7/23
- Terms of repayment, may be 15 or 30 years
- LTV of mortgages up to 100 percent financing
This type of mortgage loan can really help a lot of home buyers, particularly those who are in need of a loan but are rejected by most conventional lenders. So if you're like one of these people who have experienced certain credit issues, but really want to have your own home in Rancho Santa Fe real estate, you should grab this chance to prove that you're worthy of the loan.
It's advisable to apply for this loan first before you look at the available homes; or if you have already found the one you want, you should get pre-approved before you present a purchase offer to the seller. This way, your chances of getting that house you want is much higher. Talk to your real estate agent and ask him about all the options you have to make things smoother for you during the home buying process.
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