When a mortgage lender examines a loan applicant's file, one of the first things he will look at, is the potential borrower's credit record. This will help him determine the risk he might take with the borrower.



Description

The mortgage strategy for ?less than perfect credit? takes place in 3 or 4 stages. The goal is to obtain an average interest rate over 15 or 25 years which is as low as possible - taux hypoth?caire.

Step 1: Secure a mortgage

You can get a mortgage, even with a bad credit rating. You will just have to realize that there are some limitations that those who have good credit ratings don't have to accept.

There are a number of lenders (at least 10) who specialize in these types of loans and have less strict credit criteria than other lenders. You can usually obtain a home loan with a short maturity period, such as three years. This is not normally recommended, but it will get you started.

Just remember that the two most important aspects that impact your interest rate are your credit report and your down payment.

Step 2: Repair your credit

Once you have a mortgage, you should spend the first two years getting your credit back in shape. If you work with an experienced home loan credit counselor who specializes in these cases, he will be able to help you with the steps you need to take to achieve this goal.

Step 3: Renew your mortgage at the best rate

Once you have established a good credit report, some lenders will be prepared to offer you a very good rate - taux hypothecaire. You have to know how to properly present your file to the best lender. In certain cases where the credit report is very poor, you may have to take an additional step before you will get the best rates. (taux hypoth?que)

Advantages:

? Buy a house sooner and be able to benefit from any upswings in real estate values. (Read our publication: Will housing prices continue to rise? Forecast for 2006 and 2007?)

? You have established a period of time during which you can work on your credit report

? You will get improved rates (taux hypoth?caire) in the future - taux hypothecaire

Disadvantages

? The interest rate for the first three years is often very high - taux hypoth?caire.

? The mortgage payments may be very high (it is possible in some cases to keep the payments lower by increasing the amortization period during step one in order to reduce it in the third step).

? Financial institutions often demand more documentation in addition to the mortgage note.

? The down payment is very important, but it is possible to have a no down payment mortgage in certain cases.

? Assessment fees are the responsibility of the buyer

? It is not possible to receive a pre-authorization, but a good mortgage financing credit counselor who specializes in this type of loan should be able to help you.

WARNING:

There are mortgage brokers who have additional commissions for what they consider ?difficult? cases. It is normal for a broker to charge a fee to the borrower if the lending institution does not pay the fee or if the loan is over $90,000. In over 80% of loan applications, the lender pays the broker's fees.

Avoid doing business with a broker if they:

- Require the payment of their fees before the mortgage financing has been completed (at closing).

- Has extremely high fees (the typical fees for a broker is 1.8% of the financed amount, minimum $1,500.

Conclusion

The mortgage strategy for ?less than perfect credit? can help you to own a home now and to benefit from the fact that real estate prices will probably continue to rise. With a little effort, and the help of a good mortgage financing credit counselor who specializes in less than perfect credit situations, you can quickly obtain the best interest rates. (taux hypothecaire)

Make an appointment now with a ?less than perfect credit? mortgage financing consultant to find out more about what is possible in your case. This is a free service that is free without any obligation