Bad Credit - Can i get a mortgage?
Is it possible to get a 100% financing mortgage with credit scores around 525? I am not concerned with the interest rate- I just want to get into a home first then refinance. Also, Does anyone know what the highest interest rate you can get on a home loan? Thanks!
- Rush is a bandLv 71 decade agoFavourite answer
Unless you qualify for a VA loan it wouldn't matter if your credit scores were 825 - no one has 100% financiing anymore. Even the FHA backed loans require 3.5%
So the first part of your first question is no, it's not possible. The second part of your first question has the same answer. It's not possible to get a mortgage today with a credit score of 525. A credit score of 525 means you make a habit of not paying what you owe. Why would someone make a very large loan to someone who is in the habit of not paying what they owe? Guess what? They don't do that.
Refinancing isn't easy and it isn't cheap. You essentially pay closing costs all over again. Some states let lenders put pre-payment penalties in so that the lender makes a lot of money when you go to re-finance.
Since jumbo loans with good credit can run 7% in this environment, I'd imagine you could easily get to 9-10% if you could even find someone willing to finance you.
ps - you'd be much better off cleaning up your credit and saving money for a downpayment.
- smrtblondieLv 51 decade ago
I'm not sure where you're coming from with this.
You're basically asking a lender to believe that (1) you will magically find a way to pay back 100% of the cost of the new home, with interest, (2) you're a safe bet when you won't risk a dime of your own money on the purchase, and (3) that the market will suddenly reverse to the point you'll flip a house if you need to to repay the loan.
Maybe you think it's still March 2008. You will never find a lender willing to accept this risk without security. Or to put it another way: You will never find a lender to finance you 100% without security regardless of you credit score. You will never find a lender to finance you part way with a crappy credit score. IF you find 20% down, you MAY find a financier to put up the rest WITH a significantly higher credit score; but plan on a pathetically high rate.
The days of getting into a home simply because you "want" to are long, long gone.
- Lauren FLv 71 decade ago
Sorry - no bank is going to touch this one. Why do you think they are in so much trouble? They lent money to people with no money down and bad credit, so the first bump in the road and the homepurchaser went into default.
Also, refinancing will cost you thousands of dollars, and there is no guarantee you will be able to do this if the value of your home doesn't go up.
Do yourself a favor - if you have some spare cash, pay off whatever is causing your credit score to be so bad, save up a downpayment equal to at least 5% of the purchase price of the house, then go shopping.