 Subprime
Mortgages and Bad Credit California Mortgages
Setbacks in life do happen and we understand how it feels to be denied
or rejected because you have credit problems. That is why FindMyRate has
personal loan consultants who will work with you to help get you qualified
into a California loan program. We are experts in finding solutions because
we believe in second chances!
Or Call us at 866-878-7830 for a FREE loan consultation.
- Credit Problem Programs - FindMyRate.com's skilled mortgage
loan officers believe that everyone is entitled to a second chance.
There are many loan programs that may be available to you, even if you
do not meet traditional approval guidelines. While the interest rates
on these mortgage loans are generally a little higher, our non-conforming
mortgages provide you with an opportunity to rebuild your credit, help
you to consolidate outstanding debts, make home improvements or provide
you with additional cash for whatever you may need!
- Imperfect Credit Loans - Imperfect credit home mortgage loans
allow borrowers with less-than-perfect credit to qualify for competitive
interest rates to buy a home, consolidate debt, lower payments or make
home improvements.
How To Improve Your Credit
If you have had credit problems, be prepared to discuss them honestly
with a mortgage professional. Responsible mortgage lenders know there
can be legitimate reasons for credit problems, such as unemployment, illness
or other financial difficulties. If you had a problem that's been corrected,
and your payments have been on time for a year or more, your credit may
be considered satisfactory.
Below are some ways to improve your credit:
Build a Positive Payment History. The most important factor is
to make your monthly payments on time. This will improve your credit score.
Missing payments is a negative factor. Some cases are worse than others.
For example, if you have not missed any payments recently, lenders may
think you are (or have become) responsible and do not (or will no longer)
miss payments. Also, missing payments on only a few accounts is not as
harmful as missing payments on most or all of your accounts, because lenders
realize that many people miss a payment (or pay late) once in a while.
Also, missing a single payment is not as harmful as missing several consecutive
payments because many lenders consider missing 3 or more consecutive payments
as an indication that you may never repay them. Finally, it is not as
harmful to miss payments on accounts with low balances as it is on accounts
with high balances because lenders stand to lose less money on low balances
if they remain unpaid.
Use pre-addressed envelopes enclosed with your statements to mail your
payments and call the company if you don't receive your usual statement.
Also send your payment as early as possible if you carry a balance. Most
companies calculate interest on a daily basis, so the sooner they receive
your payment, the less interest you'll pay.
Don't procrastinate. It's the day your payment is received that counts,
not the postmark date. Give the post office sufficient time (five business
days is a good guideline) to deliver your mail. Late payments may mean
late fees, higher interest, and/or a negative mark on your credit report.
Never send cash. Open a checking account if you don't have one, or spring
for a money order and keep your receipt. Finally don't forget to tell
your creditors your new address when you move.
If you are worried about making payments, make a list of your debts and
when the payments are due. Contact your lenders immediately if you think
you will have trouble meeting the monthly payments to arrange a payment
schedule.
Use Credit Wisely. Credit cards can be invaluable in a crisis,
since they allow you to charge items and pay them off over time. But they
can also be dangerous if you aren't careful and charge more than you can
afford. If you do use credit cards, choose those with the lowest interest
rates and pay them back as soon as you can to cut your costs. Maintain
low balances on your credit cards. This makes your score higher too. High
balances are a negative factor (except for some types of installment loans
such as mortgages and auto loans), because lenders worry that you are
living beyond your means and may not be able to repay them. This is particularly
true with credit card debts. Lenders do evaluate how much you owe (your
debt) in relation to how much you earn (your income). However, changes
in your employment and income, or certain life events (such as divorce
or illness), may cause difficulty for you to pay your monthly bills. Meanwhile,
low balances are a positive factor because lenders do not stand to lose
too much if you become unable to repay them. However, never using your
credit cards may be considered a negative factor. First, it does not provide
lenders with information about how you typically use credit and repay
your debts. Second, it also means that you have a lot of available credit,
which you may decide to use if you experience financial trouble.
Avoid Excessive Credit Applications. This makes your credit score
higher as well. When you apply for any type of credit (such as a mortgage,
auto loan, credit card, department store card, etc.), your credit history
is checked by the lender considering your application, and it is noted
on your report as an "inquiry." Although inquiries are a natural
result of applying for credit, lenders dislike seeing many within a short
period of time. This is because it is hard for them to determine whether
you are applying with different lenders in a search for the best offer
or if you are desperately trying to obtain credit because of financial
trouble. Remember, making many applications in a short period of time
could hurt your credit score. Therefore, try to limit your comparison
to a small number of lenders when "shopping" for the best offer.
Know Your Credit Rating
Consumers have been hearing a lot about the importance of their credit ratings.
A good score can make a difference of around $500 in monthly payments on
a $250,000 mortgage, and also can mean much lower credit-card rates. But
what's considered a good credit score?
How is a credit score calculated?
A credit score is a value assigned to several criteria used in making lending
decisions. Criteria include the amount you owe on non-mortgage-related accounts
such as credit cards, your payment history and credit history. Scorers take
this information from your credit report and plug it into formulas that
calculate a value representing the amount of risk you pose to a lender.
That value takes into account the track record of other consumers with similar
credit profiles. By looking at this value, or score, lenders are able to
roughly gauge whether it's a good idea to extend you credit. Fair Isaac
calculates the widely used FICO credit score on a scale ranging from 300
to 850 the higher, the better. It is used nationwide by lenders to judge
credit worthiness. The score calculate generally used information from one
of the three main credit bureaus: TransUnion, Experian and Equifax. It's
possible there are discrepancies among information held at each of the bureaus
that could affect your score and the interest rate you receive.
What else affects my chances for a loan?
A credit score is just one component of the credit evaluation. This is especially
so in the case of mortgages and car loans. In examining these types of applications,
a lender will look beyond your raw credit score to scrutinize your payment
history, among other things. For instance, the fact that the late payments
on your credit report were on a small credit card (as opposed to a mortgage)
could work in your favor. Lenders also take into account such factors as
your income and earning potential, both indicators of your ability to repay
a loan. Two borrowers with above-average FICO scores of 660 can get different
interest rates, based on their existing debt burden and ability to meet
required payments based on their income.
Is the score treated the same for all kinds of loans?
For the most part the answer is no. A mortgage loan, by virtue of its size
and long repayment terms, will usually require you to have a higher score
to qualify for a favorable rate than, for example, a credit card. But the
nature of the loan may also play a role. For instance, a borrower with a
low credit score applying for a 15-year mortgage with a 25% down payment
may qualify for a better rate than someone applying for a one-year adjustable-rate
mortgage. Mortgage lenders will typically look at all the risks involved
before deciding on a rate. A lender whose loan portfolio has a high concentration
of risky clients may require you to have a higher score to qualify for a
prime interest rate than a lender with relatively lower risk in its portfolio.
So it's possible that given a particular score, you might get a prime rate
at one lender, and get a less favorable rate at another.
What can I do to improve my score?
It's a good idea to make sure that the data each bureau has on you are consistent
and up to date by ordering a copy of your credit report about once a year
and disputing any inaccuracies. You also should be aware of what affects
your score to help minimize the damage you can potentially do to it. People
tend to get nervous when they receive credit-card solicitations in the mail.
However, scorers treat these solicitations as "spot" inquiries,
which do not affect your score. Whenever you apply for credit, on the other
hand, it's treated as a “hard inquiry" that's factored
into your score. Too many inquires over too short a time can have a negative
impact. But scorers make special provisions for mortgage and car-loans inquiries
because people tend to shop around more for these products.
Overall, though, credit inquiries account for only about 10% of the total
score. Also, keep in mind that the two main components of the score are
your payment history and the amounts you owe. A bankruptcy filing, which
can remain on your credit report for as long as 10 years, and foreclosures
can "significantly lower" your score, you should avoid taking
on more credit than you can handle. Late payments will also work against
you, so it is important to make all loan payments on time even if it means
paying the minimum balance. Ideally, you should avoid "maxing out"
your credit lines and strive instead to maintain low balances. This will
improve your score over time, because people owing smaller amounts on
their credit accounts are viewed as having a lower repayment risk than
those who owe more. By carefully managing your credit, it's possible to
add as much as 50 points in a year to your score. There is nothing that
you can do to your credit from which you can't recover.
How much should I worry about my score?
Not that much, unless you have an especially troubled financial history.
Much of the current anxiety over credit scores stems from the public's misunderstanding
of the way in which these numbers are used and factors that affect them.
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