Applying For A Mortgage With Bad Credit Due To Divorce
Divorces often lead to bad credit scores, which can affect the
type of mortgage you qualify for. When looking for a mortgage,
be sure to deal with the financial impacts of your divorce and
investigate a number of lenders. That way you will not only buy
a home, but be sure that you are getting a competitive rate.
Divorce’s Impact On Credit
Your ex-spouse can continue to negatively impact your credit
even after the judge has dissolved your marriage contract. If
you sign joint financial agreements, then you are responsible
for paying those loans even if the judge signed over the
accounts to your ex.
This means that if the house is the other person’s and they are
making late payments, then your score will go down no matter
what the judge said. The same is true with credit cards.
Improving Your Score
Make sure that all joint accounts are transferred to individual
accounts after the marriage. Homes and cars should be
refinanced, and credit card balances should be transferred to
new accounts with old accounts closed.
You can also include a letter of explanation in your credit
report, explaining why there were late or missed payments. Be
sure to include a copy of your divorce decree so lenders can see
that it is final.
Finding Reasonable Rates
Even with a poor credit score, you can still find a home loan
with reasonable rates. The most important thing is to
investigate rates and terms of several subprime lenders. You can
quickly weed out the scammers who refuse to disclose terms or
who charge excessively high closing costs.
Even if you have a bankruptcy on your record, you can still
apply for a mortgage. Some lenders will look at your application
after the bankruptcy has been discharged for a year, others two
years or longer. Each lender has their own set of
qualifications, so do not hesitate to check with several
financing companies.
You can also improve your mortgage rates by opting for an ARM
which is easier to qualify for. Rates are temporarily lower than
fixed-rates, resulting in lower monthly payments. You can also
lower rates by increasing your down payment.
Here are our recommended sources for bad credit mortgage lenders online:
Top Recommended Mtg Lender
For People With Credit Problems
-Updated 2008-:
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