Difficult Mortgages

Written by Beth Hrusch
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Some mortgages are relatively straightforward, and some are more difficult. There are often many reasons for this but one of the most common is the credit history of the borrower. Someone with bad credit, no credit or a past bankruptcy is likely to find that they have less leverage when borrowing money. Loans made to people with less than perfect credit have their own set of stipulations. These are designed to protect the lender as much as possible from default and loss of the investment.

Difficult, But Not Impossible

Of course, depending on the extent of the credit damage, it is still possible to get financing for a major purchase such as a home or other real estate. Mortgages are available for just about anyone, but it is best in these cases to work with a mortgage company that specializes in difficult loans. This kind of lender or broker is familiar with the ins and outs of bad credit lending.

A borrower with bad credit may find that the loan available will come with a higher interest rate and a shorter term than one offered to someone with good credit. This will often equate to a higher monthly payment. However, a mortgage is still a good way to rebuild credit. A home equity loan is another option that can help a high-risk borrower use the value of his or her home to get needed funds.

Loans for those in difficult circumstances require special care, and it is important for the borrower to understand what is involved in this process. Bad credit does not entitle a bank to charge unreasonable lending fees or interest rates. Regulations governing high-risk lending are designed to protect both parties in this kind of transaction, and all borrowers should be aware of them.

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