A bad credit mortgage can help a person out of a tight spot, although they are not always the best idea to get out of a financial mess. A person with a judgment may against him may have a more difficult getting a loan than a person with merely bad credit. A judgment showing on a person’s credit report makes a person even more weary of lending money to a person.
Can I Get a Bad Credit Mortgage With a Judgment
A person can still get a bad credit mortgage with a judgment against him, and the process is similar to the process for getting any other bad credit loan. However, banks are not willing to loan the funds unless they see that a person is willing to put up some collateral first.
Collateral should be something worth value – a car, a boat or even showing the bank that you have some cash up front. It also pays if a person has someone willing to co-sign a loan, although this is a risky proposition for the co-signer. If the original lender defaults, the bank will go after him for the money.
What About the Rates for a Bad Credit Mortgage?
Getting a bad credit mortgage with a judgment does not affect the interest rates that the lender must pay. A borrower will pay more over the life of the loan than a person with good credit would. However, there is a small silver lining to the process. The sub prime interest rates are not higher for people with bad credit.
If a person defaults on the loan, it will further negatively affect his credit score, but if he pays it off regularly and works on other items on his credit report, he can eventually refinance in the prime rate mortgage, although he may want to wait for the credit crunch to ease.
*Affects pricing. With the No Closing Cost
Option, borrowers finance the closing costs instead of paying for them at
closing. Borrowers who pay closing costs at closing may qualify for a lower
interest rate. Some upfront fees (ex. credit report and appraisal) may apply
and may be credited at closing.
*Refinancing or taking out a home equity loan or line of credit may increase
the total number of monthly payments and the total amount paid when compared to
your current situation.
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