FAQ About Problem Credit and Bad Credit Mortgages, Refinance, Foreclosure, Bankruptcy.

If I have credit problems or bad credit, can this website help me get a conforming rate mortgage?

There are many examples of this website's ability to attract lender offers for conforming rate mortgages; even with credit problems or bad credit. This program can often get an otherwise, "non-conforming file" serious bids from conforming rate lenders. We place emphasis on this and keep track of wholesale lenders that are specifically suited for people with credit and income issues. Terms like "problem credit" or so called "bad credit" reflect different meanings for different lenders. Some underwriters will always be more lenient than others. As well, there are times when even a more conservative wholesale lender might be finalizing a portfolio; and at such time, simply for the lender's cashflow purposes, that particular lender will be more aggressive with credit issues. What we do is much about maintaining an awareness of what wholesalers are lending to whom and when they're lending to whom.

However, in order to prevent the generation of false hope; and not mislead anyone, it is important to mention that, if your credit problems are serious or if your have an extreme case, or a repeated history of bad credit, chances are you will not qualify for a conforming rate mortgage. However, the eMortgage auction does produce many good deals with non-conforming wholesale lenders. The eMortgage auction has repeatedly proven to be an effective means of attracting serious wholesale lender offers for folks with serious credit problems and extremely bad credit cases and do so at fair rates. Unfortunately, people with credit issues often find themselves negotiating from a weaker position than those with good credit. This program turns it around a bit; essentially because of three (3) elements.

(1) eMortgageSolution.com is a nationwide network of wholesale oriented mortgage professionals constantly sharing information with each other and paying specific attention to the best suited lenders and programs for people with credit and income issues;

(2) problem credit or bad credit, wholesale is almost always better than retail; and

(3) the lowest bid of an auction with the right lenders will usually bring about a better deal than otherwise.

Talk to us about problem credit / bad credit.

Will I have to go out of pocket to pay my own closing costs because of credit problems or bad credit?
Usually not. In most cases, credit problems and bad credit should not impact whether or not your closing costs can be financed as part of your loan. However, because credit problems and bad credit can impact the "LTV", ("loan to value" or a borrower's actual loan amount), one of the issues that is addressed in our program is an ongoing pursuit and involvement of high "LTV" wholesale lenders specifically for people with credit and income issues.

Does it cost borrowers with credit problems or bad credit more for closing costs than it costs borrowers with good credit?
In most cases, it should not. Closing costs for folks with credit problems can be kept down by involving the right wholesale mortgage lenders and wholesale oriented agents approved by those lenders. Usually, closing costs should be about the same as it would be for someone with good credit. However, with serious credit problems, wholesale lenders will compensate some of the risk by increasing rates somewhat and/or with an increased APR that will reflect an increase in closing costs to some degree.

Talk to us about problem credit / bad credit.

Would a refinance be a solution to my credit problems or would it repair my bad credit?
In this regard, there are two issues to be addressed:

1) Cleaning up credit problems; and
2) re-establishing credit.

Cleaning up credit problems or bad credit means basically paying off the creditors that are reporting derogatory issues on your credit report.

Re-establishing credit means starting fresh with some accounts or lines of credit that will be on your credit report; and thus making sure that you pay those on time every month. This could be simply by beginning to pay already existing accounts in a timely manner; or preferably, initiating new accounts and maintaining timely payments on those. Secured credit cards are a good example.

Thus refinancing will not by itself rectify your credit problems or repair your bad credit, but it can be a useful first step toward accomplishing those objectives.

A refinance is often the only way for a homeowner to begin to repair and/or re-establish credit. This is because the continuous bills, especially revolving credit card balances, loans and or even mortgages that seem to be constantly rolling two or three months behind, become virtually impossible to catch up, obviously because of that person's cashflow. Thus a refinance/debt consolidation done at the right time, not only provides the homeowner with a fresh start; but it often increases a homeowner's monthly cashflow by combining all monthly debt into one reduced monthly payment which is usually hundreds of dollars less per month than what the bills were before the refinance. The result is a fresh start with extra cashflow every month. Thus, a proven formula to put a homeowner on the road to recovery and an eventual end to the problem credit and bad credit nightmare.

Talk to us about problem credit / bad credit.

Can I qualify for a refinance with a previous bankruptcy?
Yes you can. Depending on how long ago the bankruptcy, the greater your chances for a conforming rate mortgage. In addition, there are some wholesale lenders that provide almost conforming rates with bankruptcy discharged or dismissed only one year prior.

Can I refinance if I am currently in bankruptcy?
Yes you can. In fact, some lenders can actually provide FHA loans at low interest rates to refinance a borrower out of chapter 13. re: HUD Handbook section 4155.1 Rev-4. "A borrower paying off debts under Chapter 13 of the Bankruptcy Act may also qualify if one year of the pay-out period has elapsed and performance has been satisfactory, and the borrower also receives court approval to enter into the mortgage transaction."

Talk to us about problem credit / bad credit.

If I have a previous foreclosure on my credit report can I qualify for a mortgage or refinance?
Yes you can. Depending on how long ago the foreclosure, the greater your chances for a conforming rate mortgage. However, most mortgage lenders are generally more conservative about problem credit or bad credit when a previous foreclosure is involved. As a general rule, if the foreclosure is at least 2 years old, wholesale nonconforming rates can usually come fairly close to conforming rates.

Can I refinance my house if it is currently in foreclosure?
Sometimes you can. If you can't prove your income, you can usually borrow up to 50% of the value of your house. However, if you are able to prove your income, then you can usually borrow up to 65% of the value of the house. Some people are able to convey a deed transfer to a close friend or relative while simultaneously refinancing the property in the name of that 3rd party. If that individual is credit worthy, often up to 90% of the value of the house can be borrowed which is usually enough to satisfy or otherwise negotiate settlements with the current mortgage company or other creditors. This will often give the distressed homeowner a chance to re-establish some credit and within a year or so, take the house and a new mortgage back into his or her name; thus relieving the friend or relative of any further obligation.

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