Bad Credit Home Loans in Erie Illinois
The bad credit mortgage is often called a non-prime mortgage or alternative lending and is offered to Erie homebuyers with low credit ratings. Due to the low credit rating, conventional mortgages are not offered because the lender sees this as the homebuyer having a larger-than-average risk of not following through with the terms of the loan. Lenders often charge higher interest rates on non-prime mortgages in order to compensate for the higher loan default risk that they are taking.
Candidates For Erie Bad Credit Mortgages
Some people with poor credit profiles or a small down payment may have trouble borrowing from conventional lenders. One alternative to consider is obtaining a Federal Housing Administration loan or a non prime mortgage. These loans have liberal underwriting requirements which allow people to purchase a home with a poor credit score and as little as a 3% down-payment. Non Prime and FHA borrowers can qualify with credit scores between 500 and 620. Veterans may want to explore low-cost VA loan opportunities.
Most borrowers use a non prime mortgage with the home buyer planning on refinancing at some point into a more appealing loan with a lower rate. However if the homeowner still has outstanding credit issues or the mortgage market tightens up then they might not be able to refinance. The higher rate can cause a prohibitively higher monthly payment, & an inability to refinance can mean a loss of home ownership.
The below items are the general guidelines that can be used as a rough rule of thumb when determining whether a consumer may be a candidate for a non prime, FHA or VA loan:
- 1 Day out of Foreclosure, Bankruptcy, short sale, deed-in-lieu.
- Loans up to $1 million
- Credit scores down to 500
- Up to 100% LTV
- DTI up to 50% considered
- Owner-occupied, 2nd homes, and investment properties
- Non-warrantable condos considered
- Jumbo loans down to 500 score
- 5/1 ARM or 8 – 30-year fixed
- No pre-payment penalty for owner-occ and 2nd homes
- No active tradelines OK with housing history
- SFRs, townhomes, condos, 2-4 units
- Seller concessions to 6% (2% for investment)
Apply even with Poor Credit 888-882-1058
Erie (/ˈɪəri/; EE-ree) is a city in and the county seat of Erie County, Pennsylvania, United States. Named for the lake and the Native American tribe that resided along its southern shore, Erie is the fourth-largest city in Pennsylvania, as well as the largest city in Northwestern Pennsylvania,[5] with a population of 101,786 at the 2010 census.[6] The estimated population in 2016 had decreased to 98,593.[4] The Erie metropolitan area, equivalent to all of Erie County, consists of 276,207 residents. The Erie-Meadville, PA Combined Statistical Area has a population of 369,331, as of the 2010 Census.
Erie is halfway between the cities of Buffalo, New York, and Cleveland, Ohio, and due north of Pittsburgh, Pennsylvania. Erie’s manufacturing sector remains prominent in the local economy, though health care, higher education, technology, service industries and tourism are emerging as significant economic drivers. Over four million people visit Erie during summer months for recreation at Presque Isle State Park, as well as attractions such as Waldameer Park.