Mortgage Lenders for Veterans with Bad Credit?
Question: My sister and her husband would like to buy a home. This house is very special to her since it is close to our parents house and always wanted to buy it. She can get the house for a good price around $40,000, but they had some credit problems a few years ago. They also filed for bankruptcy about two years ago.
Her husband is a Veteran, but he did try to apply for a VA Loan and was told that he missed the eligibility requirements by a few weeks.
Are there any companies that would give someone like them a chance? A mortgage on $40,000 will be lower than the rent they are now paying per month. Since he is also a veteran, are there any companies that may give them a better chance because of his military service?
I do remember a discussion a few months ago on this newsgroup about a bank or loan company for veterans, But I can’t remember the name or if they offer loans to people with bad credit.
Answer: Yep, state laws undoubtedly vary. Point is, if you have bad credit it’s going to be difficult to find a property owner who won’t want some extra consideration over and above what a conventional lender would. That usually translates to at least a higher interest rate (to cover the increased risk that the borrower will default). In theory the default provision whereby the owner gets the property back shouldn’t be of concern to a borrower who intends to make timely payments.
One caution I *would* mention to potential buyers is to make sure they have the option to pay off the balance of the contract at any time. Thus they do have the option of getting conventional financing ASAP as well as selling the property to someone else should they decide too.
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Filed under: Bad Credit Loan
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