You’re the first to admit that a few issues damaged your credit some time back. Fortunately, things are better now and you’re on better financial footing. What remains is to repair the damage done to your credit a few years ago. In the meantime, you’ve found a home that you would like to buy. Do you have to wait? With the right bad credit mortgage by CloverMortgage, you might be approved now and be able to make the property your own. Here are four things that you can expect, assuming the mortgage application is approved.
The Mortgage Will Come With a Higher Interest Rate
If you ask anyone about what to expect with a bad credit mortgage, most will mention the higher interest rate immediately. What they may hint is that the rate will be significantly higher than the current average rate. While that may be true with some lenders, that’s not the case with all of them.
What you will find is that it’s true bad credit mortgages come with higher interest rates. You’ll also find that there are mortgages for people with poor credit that still have competitive interest rates. Since you spent a little time comparing offers from more than one lender, you found the one that offered the best overall rate and terms. That diligence allowed you to finance the purchase of the home and save a little money in the process.
There May or May Not Be More Fees to Pay
Just as you found some bad credit lenders offered better interest rates than others, it also became apparent that the lenders varied in the types of fees you had to pay upfront or over the life of the mortgage. By projecting the total cost of accepting each of the offers, you quickly figured out which ones would cost less money over time. There’s a good chance that the deal you settled on came with a competitive interest rate and relatively few additional charges bundled into the amount financed.
The Installment Payments Will Fit Into Your Budget
Bad credit lenders want borrowers to be able to pay their mortgages on time. That’s why they work with applicants to come up with reasonable payment schedules. While it took a little time to come up with the plan, you now have a mortgage that comes with instalment payments you can meet every month with ease. In fact, you may even be able to make an extra payment now and then. If so, that will ensure you settle the full amount sooner rather than later.
The Positive Comments Submitted to the Credit Bureaus Will Improve Your Scores Over Time
Thanks to the fact that you did your due diligence and confirmed that the bad credit lender does report to the major credit bureaus, there are starting to be positive comments appearing on your credit reports. Those more recent comments are helping to offset the negative ones from a few years ago. Over the life of the mortgage, you can expect those comments, paired with your improving debt to income ratio, to help repair your credit scores. By the time you settle the mortgage in full, your score could be quite healthy again.
A bad credit mortgage is the right solution for many people. Provided that you’re in a position to manage the debt responsibly and lock in the best possible terms and conditions, buying a home now could be the smartest move that you could ever make.