A low income coupled with a bad credit history does not necessarily make you ineligible for a home loan. After attending to some newly enacted legal legislation and regulations, many traditional financial institutions such as banks and credit unions, and other lenders as well, have been able to increase the number of bad credit and low income home loans to many people.
Steady Employment and Salary Requirements
Most often, because it is indeed a different way of life, loans for folks with bad credit and low incomes are more often used in rural communities. In rural communities incomes are apt to be lower and many folks have not really had an opportunity to establish a credit rating of any kind. So, most often when the terms bad credit are used, it really means no credit history. Loan amounts are based on the salary of individuals and he or she must meet certain income limits and have steady and reliable employment.
Closing Costs and Down Payments
For most low income or bad credit home loan borrowers, the biggest obstacle seems to be coming up with down payments and closing costs. Closing costs are primarily administrative fees that go toward paying for title and deed searches to ensure there are no other owners of the property, as well as for processing documents, transaction fees, and also for legal costs. Down payments are often required to ensure that the borrower has a stake in retaining the property and making payments. They also lower the actual cost of the mortgage. The closing costs are often an amount fixed by the lender and can be rather low. Many lenders do not require a down payment.
Bad Credit and Low Income Home Loans Can Differ
Bad credit and low income home loans can differ in a number of ways. As a rule, the financial circumstances of low income folks seem to be in a constant state of fluctuation. And, the risk of default is inordinately high. In an effort to make financial requirements easier on low income folks and to match their weekly pay days, some lenders have set up recompense terms that offer weekly payments.
Submitting Applications for Low Income Bad Credit Home Loans
Individuals interested in obtaining a bad credit low income home loan, should submit applications that clearly state their financial situation and their needs. Lenders also like to see an explanation for poor or no credit reports. The borrower should be quite explicit as to what happened, or did not happen, to bring their credit scores to the present state. Lenders also want to see a plan for repaying the loan, what sacrifices the borrower might be willing to make to own their own home.
Online Lenders Willing to Make Low Income Bad Credit Home Loans
A good many traditional lenders and non-bank lenders are will to provide home loans to low income poor credit folks. Many will offer low interest rates and will ask for only low down payments, or none. Indeed, some lenders actually specialize in these loans. Interested individuals should go online to avail themselves of lenders willing to finance them. Brokers can take general information and provide a list of lenders willing to finance based on the information given. Low income bad credit home loans are available.