Bad credit government loan mortgage
People suffering from bad credit often have this problem of qualifying for a mortgage loan. However with the help of the bad credit government loan mortgage you can easily qualify for a mortgage loan and that too at considerably lower interest rates.
The government makes these bad credit mortgage loans available by two departments the Federal Housing Department (FHA) and the Veteran Affairs Department (VA). Let us see both of these bad credit government loan mortgages in detail.
FHA bad credit government loan mortgage
These loans as mentioned are given by the Federal Housing Department in association with the HUD. These loans are aimed at people from low and middle-income families who find it troublesome to qualify for the traditional mortgages.
These loans are provided irrespective of the credit score and this means that people with bad credit can also be eligible to apply for these loans. This bad credit government loan mortgage is made available at lower interest rates as compared to the conventional mortgage and the down payment required is also only 3%. The amount that can be borrowed with this loan varies according to the area where you are investing.
To apply for this bad credit government loan mortgage you are supposed to provide: Details of all addresses where you have previously resided, name and address of your employer for the past 2 years, your gross monthly salary, W2 forms for the past 2 years.
The only drawback with these loans is that you will have to meet the cost for upfront mortgage insurance premium (MIP). For an FHA loan term of 15 or 30-years this comes up to 1.5% and you would also have to pay the 0.5% annual renewal premium for the term of the loan.
The other terms and regulations for the FHA bad credit government loan mortgage differs from one state to another.
VA bad credit government loan mortgage
As the name suggests these loans are made available to veterans irrespective of their credit standing. These loans aim at helping veterans in obtaining property. As these loans are guaranteed by, the VA department this reduces the risk for the lender and hence the loan is readily made available.
The VA bad credit government loan mortgage is made available at comparatively lower rates and are easy to qualify for. You can borrow up to 100% of the value of the property and there is no obligation of making a down payment. Also these loans do not require any mortgage insurance premiums. The only requirement for these loans is to provide your veteran certificate in order to qualify.
When borrowing bad credit government loan mortgage you should keep in mind that the government does not directly give out these loans. They just act as guarantors and the rest of the process is dealt with lenders that take part in these programs started by the government.
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