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Poor Credit Home Mortgage Loans - The Role of the FICO Score
If you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the FICO credit scoring system works.
FICO - Fair ISAAC & Company - is the leading credit reporting agency that lenders turn to when it comes time to credit scoring your home loan mortgage application; so if you do have bad credit history, these guys will know.
The formula used by FICO cannot be disclosed because of a decision made by U.S. Congress. There are some things generally known about FICO which that could help you understand why and how you can get approved:
1. The higher your FICO score, the better chance you have of getting that home mortgage loan. Also, the higher your score, the more room you have to negotiate a lower interest rate.
2. If you have a FICO score lower than 500, there is very little chance you'll be getting a mortgage home loan.
That said, if you have a score of:
500 - 600 you should be able to get a home mortgage loan, provided you are willing to make a down payment.
600 - 640 You should get a 100% home loan financing. Thats right, with no money down.
640 - 700 You should be able to be approved for a 125% home mortgage loan. 700+ You're in the drivers seat! You should be able to get an excellent rate with excellent terms.
3. FICO depends on each credit report, so before you apply for a home mortgage loan, if you have bad credit history, get a copy of your credit report and make sure there is nothing on there that shouldn't be there. If there is, get it changed before you apply for the home mortgage loan.
4. Wait until after you have purchased or refinanced your home before you buy anything additional on credit. More loans or higher balances can have a dramatic effect on your mortgage approval, regardless of whether or not you had over a 600 FICO score before you bought on credit.
5. Remember, the FICO score is only a part of your home mortgage loan application, so if at first you don't succeed in getting your home loan mortgage, don't give up. Some lenders may still be willing to lend to you!
People with bad credit often don't understand how the credit scoring system works. It is beneficial to find out more about it when looking to get a home loan with less than perfect credit to bad credit or when dealing with sub prime mortgage lenders.
To view our list of recommended bad credit mortgage lenders online, visit this page: Recommended Bad Credit Mortgage Lenders
Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans. The site has many informative articles and the latest finance news.
MORE RESOURCES updated Wed. July / 28 / 2021
Mortgage Rates Dropped to 2.78%, the Biggest Weekly Fall Since 2020. Here’s What It Means for Borrowers - NextAdvisor
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners - PRNewswire
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners PRNewswire
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 - Fox Business
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 Fox Business
Today’s mortgage refinance rates dip | July 20, 2021 Bankrate.com
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New Biden mortgage relief plan cuts payments by 25% The Mortgage Reports
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Strong Refi Business, Interest Rates Aren't Growing the Reverse Mortgage Audience Reverse Mortgage Daily
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CU Economist Says Rising COVID Concerns Pushing Down Interest Rates Credit Union Times
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Today’s refinance rates drop : July 13, 2021 Bankrate.com
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Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? - USA TODAY
Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? USA TODAY
Mortgage Rates Are Rising. Read This Before You Refinance. The Wall Street Journal
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Best mortgage refinance lenders in 2021 Bankrate.com
New mortgage refinance program for lower-income homeowners opens The Seattle Times
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low - CNBC
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low CNBC
15 of the best mortgage refinance companies for 2021 Fox Business
Mortgage Refinancing Initiative to Help Lower-Income Borrowers The Wall Street Journal
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 - Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 Fox Business
There’s Still Time to Refinance: Mortgage Rates Dipped Below 3% for First Time in Months - NextAdvisor
There’s Still Time to Refinance: Mortgage Rates Dipped Below 3% for First Time in Months NextAdvisor
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know - CNBC
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know CNBC
Jumbo Mortgage Refinance Rates for July 2021 NextAdvisor
Refinance Terms & Rates | Refinance Chase News & Stories
Today's mortgage refinance rates rise across all terms for the first time in 66 days | June 17, 2021 - Fox Business
Today's mortgage refinance rates rise across all terms for the first time in 66 days | June 17, 2021 Fox Business
Current 30-Year Refinance Rates for July 2021 NextAdvisor
15-Year Mortgage Refinance Rates for July 2021 NextAdvisor