Mortgage Loan Guide
Imagine this scenario: As you are driving through another state, you suddenly pass by the dream home that you have always wanted. Problem is that you already have settled in another home. But since you really desire to live in that particular property, you consider relocating. Yet how can you do so when you still have an existing mortgage on your old home? It is possible with bridge mortgage loans.
Bridge mortgage loans are also known as swing loans. They serve as transition loans to pay off the new property with the old property’s impending sale. Sometimes, when you are in a hurry to transfer and your old property does not sell in time, a bridge mortgage loan will help bridge that gap.
Bridge mortgage loans pay off old mortgages, and the rest of the money they provide goes to the down payment of new homes. When the old property is sold, you can pay off the loan and continue paying traditional mortgage for the new home. There is another option for this type of loan, wherein the mortgage of the new property is placed together with the mortgage of the old property, and this amount is what you have to pay during the term.
As with other types of loans, bridge mortgage loans have certain advantages and disadvantages. One main disadvantage is that this type of loan is short-term and it has high interest rates. You will face high monthly payments, especially if your property does not sell in time. A major advantage of bridge mortgage loans is that people with less than perfect credit rating can qualify for them since they have higher interest rates. Because of their high interest rates, you should think carefully before you apply for a bridge mortgage loan. If there are other options available that minimizes the risk, then check those options first before you decide to get a bridge loan.
Once you have decided to avail of bridge mortgage loans, you have to look around for companies that offer this type of loans. These companies include banks, credit unions, and mortgage companies. Having poor credit rating should not hinder you from qualifying for this loan since it is approved based on your real estate profile.
If you play your cards right, a bridge loan can be extremely helpful as you transfer from your old home to your new one. But as much as possible, do consider other options that are available to help you pay off your old mortgage, but if you are sure that you will be able to pay off your bridge loan, then by all means get one and start living in your dream home as soon as possible.
Can people actually get a mortgage even with a bad credit record? Are there bad credit mortgage loans that people with bad credit ratings can get hold of? There are actually a few lending institutions that do give out bad credit mortgage loans to people who have credit ratings that do not qualify them to apply for loans with major financial institutions. These institutions may have mortgage loans that are specially made for those who have less than perfect credit ratings, but these loans still carry with them certain terms for a person to qualify.
Bad credit mortgage loans can be placed in two categories, namely, a loan that lets you get a house and a loan that lets you refinance an existing mortgage you have. The mortgage loans you can get despite having bad credit are often dependent on a few things, and the ability to repay your mortgage is the first thing you have to show proof of. This ability to repay the mortgage can be proven with papers that show that you are indeed employed and you have money coming in every month, at least enough to make the payments you need to make on the loan.
When lending companies assess your bad credit mortgage loans applications, they basically try to ascertain why you ended up with a not-so-impressive credit rating in the first place. People sometimes get a bad credit rating because of unforeseen circumstances in their lives. This means that they probably got the bad credit rating because they had to use their money on emergency situations, usually accidents or family crises. This then makes them unable to pay for their credit card bills, giving them bad credit rating. Such a situation is not uncommon, and it can sometimes mean that these people are indeed capable of paying their bills and loans had they not encountered such occurrences in their lives. Another situation that may result in bad credit mortgage loans is when people got laid off for a short period of time. This can happen when people are looking for new jobs or the companies that they are working for are in some kind of trouble.
When people goes through these kinds of bad credit inducing situations, lending institutions often consider giving out mortgages or refinancing since these people were only temporarily unable to pay their debts. This is why there are bad credit mortgage loans for those people who inadvertently got themselves in a bind with their finances and who need to pay off an existing mortgage with a refinancing or need to get a home with a new mortgage.
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