SAN DIEGO, June 4, 2014 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that strives to empower home loan borrowers with first class information, valuable resources and connections to top rated industry professionals. Their articles offer in-depth knowledge in an easy to understand package which has quickly turned the website into a trusted destination for current news and expert loan advice. A fresh new article on the mortgage advice website offers tips to readers on acquiring low interest rate mortgage loans on bad credit. This new article, titled "Low Interest Rate Loans For Bad Credit Borrowers (You're NOT Out Of Luck)" shows that loan borrowers do not have to wait for credit score to be at their best in order to settle for mortgage loan with low interest rates.
Bad credit score can and will hinder a borrower's chance of securing a home loan, so it is often better to have a high credit score than not. But what is credit score? The article summarizes it as "snapshots" of how well a borrower has handled credit in the past which will often signify a loan lender's decision to hand out low-interest rate mortgage loans. Generally speaking, a credit score of 700 and above is considered good, while a credit score of 649 and below are considered red flags to loan lenders.
If a potential loan borrower does not know their credit score, they can opt to find out as the Loan Love article states: "If you don't already know your credit score, you can claim your free credit report once a year from annualcreditreport.com and receive your credit score for only a small additional fee. Once you receive your report, fix any errors and ask a lender for advice on addressing any issues that can have a quick impact on raising your score.
Be patient. Depending on your situation it could take several months or even upwards of a year before you can push your score high enough to qualify for some of the better interest rates on a conventional loan."
Good credit score will often open borrowers to loans with low interest rates, while the opposite being true for borrowers with bad credit score. However, the article tells readers not to fret; There are still loan options available for loan borrowers on bad credit score. Borrowers can still opt for the Federal Housing Administration's loan program, which offers loan options to borrowers with a minimum score of 580. This type of loan is also insured by the FHA to protect against potential loan default. This loan type may not be for everyone though, as the article also suggests:
"While that may sound good, keep in mind that despite FHA's requirements, most lenders will still want a credit score of 620 to 640 minimum for FHA loan approval.
You will also be asked to supply documentation of your income and assets. The lender will use these to determine if you meet debt-to-income ratio requirements, which typically call for a maximum of 41 to 43 percent of your monthly gross income applied as the minimum payments on all your revolving and installment debts.
While you may be able to qualify easier than you could with a conventional loan, the drawback is that an FHA loan has higher mortgage insurance requirements. In addition, these payments are required throughout the entire lifetime of the loan unless you are able to pull together a more substantial down payment."
Despite these strict requirements, an FHA loan's interest rates are still comparable to that of a conventional loan. The Federal Housing Administration also offers borrowers with bruised credit scores the chance to reduce the waiting period on qualifying for a loan, such as their "Back to Work" program.
To learn more on low interest rate mortgage loans on bad credit, please visit LoanLove.com to view the complete article.
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
News distributed by PR Newswire iReach: https://ireach.prnewswire.com