Do You Have a Bad Credit? - Useful Info on No-Deposit Mortgages

If you have a bad credit and in the impossibility of making a down-payment to obtain a mortgage loan, you can consider applying for a no-deposit mortgage that are available with many sub-prime lenders.

It is true that the for the past year, the housing market has recovered and at this point, house sales are on the rise again and by the time you manage to save a down-payment amount, the prices will become so high that you will find out that your saved amount is still not enough to allow you make the deposit. So you should start considering looking for those lenders who are willing to help people with bad credit and who have no money to make a down-payment.

The thing with this down-payment usually works in this way: you put down 20% of the total value of the house and the rest of 80% is covered by the lender through the mortgage loan they offer to you. But at the same time you have to present a good credit score if you want to benefit from affordable monthly repayment rates. Those who are found with a credit score less than 600 may not even qualify for a down-payment mortgage unless of course you agree with a high monthly interest rate.

Aside from the option of resorting to sub-prime lenders, you can have another possibility: to find a house seller who will put up the 20% and carry the mortgage of this amount. The other alternative would be to find the lender who can offer you a loan of this amount (the 20% of the house-to-buy value) and obtain as such the down-payment with which you apply further for the mortgage loan. In some cases, you can find the same lender willing to offer both of these loans, but you need to carefully do the research prior to choosing the right one.

It is important to mention that each lender will have their own approval criteria and before you even apply for the no-deposit mortgage loan, check with your eligibility as per the lender's requirements.

For instance with sub-prime lenders you can qualify for this loan even if you have gone through foreclosure or bankruptcy. But at least one year has to pass from the financial incident in order to qualify for the loan. With the other lenders, you have to wait for longer (usually from 2 to 4 years) before you can be considered an eligible candidate for the mortgage loan.

Once again, before you choose the right lender for your no-deposit mortgage loan, make sure that you do some research, compare the quotes and choose wisely between the fixed rate and the adjustable rate mortgage.