Bad Credit Home Loans in Gibson City Illinois
The bad credit mortgage is often called a non-prime mortgage or alternative lending and is offered to Gibson City 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 Gibson City 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
Gibson City is a city in Ford County, Illinois, United States. The population was 3,407 at the 2010 census.
The site of Gibson City was purchased and platted by Jonathan B. Lott in 1869. In 1870, Lott built a home and a post office there, and several stores and a grain elevator were constructed. Lott named the place Gibson after the maiden name of his wife, Margaret Gibson Lott, and City was added later by the post office department.[3] Both the Gilman, Clinton and Springfield Railroad and the Chicago and Paducah Railroad reached the town in 1871, allowing its population to grow. Gibson City was incorporated as a village in 1872. A third railroad, the LaFayette, Muncie and Bloomington Railroad, was built through Gibson City in 1874.[4][5] In the same year, one of the railroads signed a contract that paid Augustana College, located in Paxton at the time, a commission of $1 per acre on all railroad land sold to Swedish settlers.