Bad Credit Mortgage Loans – Its Possible

In these days, when the economy is not as good as it used to be before, it is always very difficult to get a loan. More so when the credit score is not good. But it is not always the end of it all. People without a great credit history can still get a mortgage loan. They must make sure that they satisfy the following stipulations:

1. A person - family or friend - with good credit score should be ready to be a co-signor to the loan.

2. The property to be mortgaged should have a good clear legal and marketable title.

3. The value of the property should be high enough to cover the loan amount plus interest that accrues.

These are the conditions that determine whether a person with bad credit score can get a loan in a bank or financial institution. Apart from these points, an applicant:

1. Should be between 18 and 60.

2. Should have a regular, steady source of income.

3. Should have a Net Monthly Income (inclusive of the liabilities to be serviced) should be at least twice the Equated Monthly Instalment (EMI). In case of another person standing as a guarantor, their NMI will also be taken into consideration.

4. Should be able to repay the loan in about 7 to 10 years.

The bank/FI will satisfy itself as to the value of the property. As the loan is for a person with bad credit history, it will be lesser than what it would have been for a person with a better credit record. The loan value may not usually exceed 50% to 75% of the market value of the property which is to be mortgaged.