December 06, 2001
By: Bev Dodd
Bad credit home mortgage loan: fast approval, realistic terms
Watch the interest rates before you get your bad credit home mortgage loan. Keep in mind the three steps your bad credit home mortgage loan goes through before final approval. We'll discuss this more below.
Traditionally, brokers had advised homeowners to refinance when rates dropped at least two percentage points. Now refinancing is common with a one point drop, sometimes even less. And during a refinance boom, it's not uncommon for people to refinance when rates drop as little as one-half of a percentage point. So keep a close check on interest rates just before you apply for a bad credit home mortgage loan.
There are three steps your bad credit home mortgage loan will go through before you finally receive your money. First your employment, housing history, and finances are verified. These verifications, your credit report and your appraisal, are then forwarded to Underwriting. Secondly someone ensures that your application meets the necessary requirements for your specific loan program. The three most important things an underwriter reviews are your credit, the property itself, and your current financial obligations, including your proposed new mortgage payment, in relation to your income. The underwriter is responsible for loan approval. The Closing Department prepares your Note and Deed of Trust along with many other documents you will sign when you close at the title company. Sometimes this is all done by the same person that initially dealt with your bad credit home mortgage loan application.
Different bad credit home mortgage loan lenders apply different standards in rating your credit worthiness. For this reason, reading your credit report and understanding how your credit report might be interpreted may give you a chance to improve your credit worthiness from the point of view of a lender.
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