100% Financed Bad Credit Mortgages: Know Your Sub Prime Options

Securing 100% financed bad credit mortgages is not difficult as long as a lender who specializes in those types of loans is applied to. Most of the time, sub prime lenders are the best option.

Having bad credit can lead people to think their loan options are very limited. In fact, most home buyers tend not to know the fully array of loan options available, or even the areas different lenders can specialize in. The result is they miss out on opportunities, like 100% financed bad credit mortgages.

There are lenders who specialize in bad credit loans and who even offer 100% mortgages approved with bad credit. These lenders have different ways in dealing with applicants with low credit scores, so as to off-set the risks that turn most lenders off the idea of approving them.

Applicants with low credit ratings are better off applying to lenders who specialize in the low credit financing because most traditional lenders would easily disregard them. And even worth those willing to accept bad credit applicants, the chances of securing bad credit mortgage loans financed at 100% are very slim indeed.

Approval with Bad Credit

Applying for a 100% financed bad credit mortgage is not difficult as long as the applicant can find the right lender to apply to. Many applications gain approval if the necessary criteria are met, but the lender must also be suitable. In this case, sub prime lenders are ideal.

Sub prime mortgage lenders offer different forms of loans, such those for the self employed, for down payment assistance, for closing cost assistance and many other types that help an applicant achieve a 100% mortgage, approved with bad credit.

Often, these sub prime lenders are a better option simply because of their expertise. They also tend to charge above the general rates of interest, but are also known to offer better rates and terms than bad credit mortgage loan financed at 100% offered by the alternatives.

Advantages of Sub Prime Lenders

For first-time home buyers who may have no financial history, sub prime loans are perfectly suited. Unfortunately, a low credit score still means that the applicant cannot qualify for a prime rate, but the fact that the possibility of securing a 100% financed bad credit mortgage with good terms still exists does make up for that drawback.

The vast majority of traditional mortgage lenders expect applicants to have full-time employment for at least two years. With sub prime lenders, the condition is half that for an applicant to qualify for a 100% mortgage approved with bad credit.

Of course, not all sub prime lenders approve bad credit mortgage loans financed at 100%. In such cases, an applicant will need to have access to a lump sum in order to make a down payment and cover the closing costs of purchasing the property.

Getting Mortgages Financed at 100%

If an applicant manages to acquire a mortgage broker, then that broker is well placed to find the right sub prime lender – ideally, one that will approve 100% financed bad credit mortgages with good terms. In some situations though, the applicant can qualify for a 103% financing, so closing costs can also be accounted for.

Of course, a 100% mortgage approved with bad credit is one that requires no down payment. But no everyone can expect to secure one. This is because in order to qualify to get a bad credit mortgage loan financed at 100% the applicant must have a credit score of 580 or more. For anything above 100%, an applicant must have a FICO credit score of at least 600.

Article Tags: Credit Mortgages, Credit Mortgage, Prime Lenders, Down Payment, Mortgage Approved, Credit Score

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