| Bad credit mortgage loans help consumers and | | | | have been made then the consumer can |
| homeowners with credit problems purchase a | | | | refinance their loan and receive a lower interest |
| new home or refinance an existing one. They can | | | | rate and build equity faster. Bad credit mortgage |
| even help consumers and homeowners | | | | refinance programs usually give consumers the |
| re-establish their not-so-perfect credit and | | | | chance to refinance their mortgage and |
| improve financial stability, therefore giving them | | | | consolidate their debt to lower their monthly |
| the opportunity to apply for lower mortgage | | | | payments. |
| rates. Typically, bad credit lenders allow | | | | 3. Home Equity / Second Mortgage |
| consumers this opportunity. These programs allow | | | | Bad credit second mortgages are loans taken |
| consumers to re-apply for a lower rate mortgage | | | | after the first mortgage that are secured against |
| after 12 consecutive months of on-time | | | | the same property as the first and are based on |
| payments. Making payments on-time will also help | | | | the amount of equity you have on the property. |
| reverse bad credit scores. There are three types | | | | They are useful to consumers who want to use |
| of bad credit mortgage loan programs that | | | | the equity (the difference between the market |
| consumers can apply for: | | | | value of the property and any outstanding money |
| 1. New Home Purchase | | | | due on it) on their home to borrow large amounts |
| Bad credit home loans allow consumers with | | | | of money for a variety of different things, such |
| credit problems to buy a new home. If you are | | | | as improving financial conditions, home repairs, and |
| looking for a second home or you are a first time | | | | or purchases. Some or all of the interest paid can |
| home buyer with bad credit this is the perfect | | | | be tax-deductible and a second mortgage can |
| solution for you. Once you get your credit back | | | | usually offer lower interest rates than credit |
| on track, you'll be able to apply for a lower rate | | | | cards. The biggest benefit of a bad credit second |
| mortgage. A bad credit home loan can also help | | | | mortgage however is that it can help you get a |
| you re-establish your credit because when you | | | | second chance at establishing good credit and |
| make on-time payments on a new credit account | | | | make you eligible for better loan rates in the |
| it shows you are gaining financial stability once | | | | future. These loans are also sometimes called bad |
| again. | | | | credit home equity loans and carry the same |
| 2. Mortgage Refinance | | | | benefits. |
| Bad credit refinancing is a process where | | | | Homeowners that have bad or poor credit ratings |
| consumers that have less-than-perfect credit can | | | | should consider a bad credit mortgage loan |
| pay off an existing home loan with the proceeds | | | | program to help improve their credit scores and |
| of another loan using the same property as | | | | to get their credit back on track. |
| collateral. Once one year of on-time payments | | | | |