California Mortgage
California Bad Credit Mortgage by Carrie Reeder
California is a beautiful place to live There is no doubt
about that. But, to live in California you must pay the price, which is sky high
real estate prices. Renting, as opposed to buying in California, can save a
little bit of money. However, renting has the disadvantage of not building any
equity. As home prices in California continue to rise, you may want to be a
homeowner and take advantage of the home appreciation factor. If you're going to
be paying a lot of money to live in California anyway, you might as well be
making some money on top of it too, right?
Now, if you have bad credit
and are trying to get a home loan for California home prices, this may seem like
an impossible situation. Home prices are high and if you already have poor
credit, the fact that you need to be approved for such a high loan amount can be
an added difficulty when trying to get a home loan.
However, there is
hope. There are so many programs available today to help people with recent
bankruptcys, collections and even foreclosures, obtain mortgage financing. There
are nationwide mortgage service companies that can either approve you directly
or get you in touch with a lender who can approve you.
Here are some
suggestions of things you can do to aggressively help yourself get qualified for
a mortgage loan in California, with a bad credit history:
1. Pull your
credit and review it - Pulling your own credit will not negatively affect your
credit score like having someone else pull it will. For a list of the links to
the three major credit bureaus, click on the link at the bottom of this article.
Look over your credit history and make sure that everything is reporting
accurately. Sometimes, something as small as an account being reported as
currently being due as opposed to being included in a past bankruptcy can be the
difference of 10-15 or more added points to your credit score.
Make sure
every account that is closed is reported as being closed. Make sure that every
account that was reported in a bankruptcy is reported that way, and not being
reported as money still owed. If you have small collection accounts, try to pay
them off and then fax confirmation that the account was paid off to the major
credit bureaus so that they can adjust your credit report right away. Editing
this information on your credit report is easier than ever today because all
three major credit bureaus now make it possible to dispute and inaccuracies
online. You could pull all three reports, dispute all inaccuracies and be done
in less than an hour now. Just a few years ago, it used to take hours or days to
fill out all the necessary paperwork.
2. Find a seller who is motivated
to pay closing costs or carryback a percentage of the loan - If you find a
seller who is really motivated to work with you, that may help you get approved
with a lender. If the seller can pay your closing costs, this can free up that
money so that you may have a small down payment. If the seller is willing to
carryback a percentage of the loan then the loan-to-value may be low enough that
the lender may consider that as good as a down payment. If the seller is
motivated to work with you, they may be willing to work through a down payment
assistance program to help you make a down payment. It is illegal for a seller
to give you the down payment for their house, but through down payment
assistance programs like Neighborhood Gold and the Nehemiah program, it is
totally legal.
3. Borrow or ask for a gift from relatives toward a down
payment - After you have financed the house, you can usually take out a 2nd or
3rd mortgage up to the full value of your house, and then you would be able to
repay the relatives. Keep in mind that if you intend the money to be as a loan
only from the relatives, you would need to disclose that to the lender before
you close. Lenders usually have regulations about where the down payment is
coming from and if you are not honest, it could be considered defrauding a
lender.
To view our list of recommended bad credit mortgage lenders who
can service California, click on this link: California Bad Credit Mortgage Lenders.
About the Author
Carrie Reeder is the owner of ABC Loan Guide. ABC Loan Guide is an informational site with articles and lists of recommended lenders for bad credit mortgage loans.