Now there's a new product in town for those of you who are worried that credit issues will only qualify you for a bad credit mortgage. It is called a credit comeback loan and it is designed to help you purchase a home or refinance an existing one without resorting to a bad credit loan with exorbitant interest rates.
How Does a Credit Comeback Mortgage Loan Work?
Borrowers who suffer from bad credit are often put into bad credit home loans with high interest rates. A Credit Comeback Loan allows a borrower to qualify for a 30 or 40 year fixed rate loan or an adjustable arm (including interest only options) and drops the borrower's interest rate by .375% per year (for up to 4 years) if the borrower makes her mortgage payment on time. This can mean a reduction of up to 1.5% on the borrower's interest rate! After the four year period is over, the borrower now has a fixed rate for the life of his loan and avoids the need to refinance out of a higher interest rate bad credit mortgage.
When Should I Look into a Credit Comeback Loan vs. a Bad Credit Mortgage?
Don't settle for a bad credit mortgage, if you are looking at a new home purchase or a refinance and the rate you are quoted is over 7.5%, talk to your lender about a credit comeback loan. Credit comeback loans will allow borrowers whose fico scores are as low as 500 to qualify for a home mortgage loan. Don't settle for the exorbitant rates of a bad credit mortgage; realize your dreams, while improving your credit, with a credit comeback loan.