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How To Improve Your Chances of Getting a Mortgage with Bad Credit?

 

When you have bad credit mortgages it's very difficult to get a mortgage from traditional banks. Indeed, banks want to ensure your ability to repay a mortgage, and a bad credit rating sends negative signals about your past and current financial situation. Without a mortgage, you will find it difficult to buy the house or apartment you so covet, unless you pay a very substantial down payment. Know that there are solutions to getting a mortgage with bad credit, with a mortgage with CCJ.

Credit makes our lives hard, between home loans and consumer credit, it's not always easy to meet deadlines. Loan repayments are an important part of the worldwide budget because we subscribe to it and we also set rates and deadlines according to our current situation.

The principle of bad credit mortgages

The main principle of bad credit mortgages is that they can be used to redeem bad credit, regardless of the type of credit:

  • home loan.
  • consumer credit.
  • car loan.
  • revolving credit.

The mortgage loan then takes the form of a new loan, with a new interest rate and term: The amount of the loan is defined according to the value of the mortgaged property, but also according to the outstanding capital of the various loans redeemed. The monthly payments will then be adjusted according to the monthly repayment limit the borrower can assume. It will therefore be granted up to a certain level of indebtedness of the borrower, which generally should not exceed 33%. If the mortgaged property is still subject to a loan, the borrower may redeem the outstanding balance of the remaining loan, but this amount will be deducted from the main of the mortgage loan.

Advantages of the bad credit mortgages

By taking out a mortgage loan to redeem a bad loan, the borrower can benefit from a sudden drop in his monthly payments. Monthly payments can be reduced by more than 60%. In the case of over-indebtedness, buying back debts with a mortgage makes it possible to consolidate them into a single loan with single monthly payments. The borrower will then be able to rebalance their budget and find a debt rate compatible with their income.

Disadvantages of bad credit mortgages

Taking out a mortgage to redeem a bad loan and get out of over-indebtedness leads to a bad mortgage record. The registration of the mortgage has to be notarised and the related costs have to be paid. Therefore, this cost should be considered before taking out a mortgage for loan redemption.

Can I get a mortgage with CCJ?

Creditors can also ask the CCJ to have more than one year. If you have several mortgages with CCJ and they have been registered within the last 12 months, then you may need a substantial deposit to secure a mortgage. Some lenders will also have a "CCJ cap", which means anything over a certain number of a mortgage with CCJ and they simply won't lend.

You can certainly get that credit even if you have a mortgage with CCJ, but it all depends on the bank where it happens. Not everyone accepts people who have other debts.

What credit score is required for a mortgage?

Conventional loans generally require a minimum credit score of 620, although some may require a score of 660 or higher. Jumbo Loans: A type of non-conforming mortgage, jumbo loans have higher loan amounts than conventional loans.

What to do if you have too many mortgages?

It happens that some borrowers find themselves with too many loans and this sudden accumulation leads to a financial imbalance. That is, the monthly payments are too heavy to bear and represent too large a part of the expenses.

To get out of debt there are several solutions such as seeking financial assistance from relatives, appealing to the over-indebtedness committee, or carrying out credit consolidation. For this last solution, a study is needed to check the feasibility of the project.

The solution for the mortgages

The principle of buying back loans is to combine all the mortgages into one so that you can extend the repayment period and therefore reduce the monthly payment amount. The borrower ends up with only one loan to repay per month, it is easier to manage.

Waiving the monthly payment can be up to 60% of the current amount, however, this can lead to an increase in the total cost of the loan. A study is needed to find out if the project is feasible because certain criteria are prohibitive such as bank record, too high a debt level (more than 50%), or not enough change to live on.

How to enter the over-indebtedness charge?

In today's environment of very low-interest rates, consolidating loans can make your monthly payments easier and sometimes save you money.

As a last resort, contact your nearest over-indebtedness commission, they will have to decide within three months whether your file is admissible or not. If necessary, depending on the extent of your financial difficulties such as bad credit mortgages, or even a mortgage with CCJ, you may be subject to legal redress. Analyze your financial background before taking out loans and make sure you can easily pay the installments to avoid any risky situations.

It is quite easy to get a mortgage even in critical situations, you just have to dedicate yourself to finding a mediating solution that can help you get out of the problem.

Publication: 26 July 11:28

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