If you have a bad credit history you'll generally find it difficult to get a mortgage through the traditional lenders. But don't give up hope. The non conforming home loan was created for people in your situation
One of the factors a lender considers in assessing your mortgage application is your credit history. If you have a poor track record in meeting your credit card or other loan repayments, you will generally be considered at increased risk of defaulting. This could mean you'll pay a higher interest rate or they might reject your mortgage application altogether.
Just because you have a bad credit history doesn't mean that you will default. Many financial institutions have recognised this and so they have made available the non conforming home loan. This has enabled people with a bad credit history and even recent bankrupts to take out a mortgage.
Since you are considered a higher risk, the Lender will typically charge you a higher interest rate for a non conforming home loan. The greater the risk, the higher the interest rate. While you'd obviously prefer to pay a lower interest rate, a non conforming mortgage at least lets you get back in the game.
With a non conforming home loan, many lenders might start you off on a higher interest rate, but if you meet your repayments for an agreed period, they'll reduce that rate. A non conforming home loan can be a good way for someone with a bad credit history to improve their credit rating. To learn more about non conforming homelLoans, contact an MFAA member today.