Non Conforming Home Loan
In difficult economic times such as these it is easy to find yourself in debt or other financial difficulties. Despite this, you still need somewhere to live and this is where non-conforming home loans come in.
What is a Non Conforming Home Loan?
Non-conforming home loans, bad credit home loans, impaired credit loans and credit impaired loans are members of the same family. Basically, they are all mortgage loans specifically designed for borrowers who do not fit the usual home loan requirements. So if your bank declines your home loan application, perhaps you should look into a bad credit mortgage.
Who might need a Non Conforming Home Loan?
There are a number of reasons why you might not qualify for a 'normal' home loan and so need to look into bad credit home loan. These include:
* Having a bad credit rating
* Having been bankrupt
* Having a large amount of existing debt
* Being behind on your current home loan repayments
* Having had your loan application denied by another lender
* Having an irregular income
Why Choose a Non Conforming Home Loan?
First and foremost, you might not have much choice. If regular mortgage lenders, such as banks, see you as a credit risk it can be hard to convince them otherwise. This means that the usual home loan routes may well be closed to you.
However, this in no way means that a bad credit home loan is an inferior option. On the contrary, as someone who does not fit the average home buyers profile, you have special requirements that may be quite specific to your particular case. An experienced and reliable impaired credit lender should be able to guide you through this difficult period in your life and give you the financial support that you need. Choose the right non conforming loan, make your loan repayments on time and you have a chance to get out of debt, repair your bad credit rating and start your financial life again.
Whilst a bad credit home loan may well be the thing that gets your out of a tricky period in your life, it is not something that you should just rush straight into. A non-conforming home loan is still a loan and it still has to be repaid at an agreed rate. Given that this is a 'special' kind of loan and one that most regular financial lenders, such as banks, don't usually offer, it will come with certain additional drawbacks. The biggest of these will be greater fees and a higher interest rate than you would pay on a standard home loan.
Given that a bad credit mortgage will ultimately cost you more than a regular one, it really pays to do your research before you decide which loan is right for you. Here is a quick checklist that might help you when you are choosing between non-conforming loans:
* What are the fees?
* What is the interest rate?
* Is the interest rate variable or fixed? Which suits you best?
* How often are the loan repayments?
* What happens if you default on your loan prepayments? Are there financial penalties? Could you lose your house?
* How long does the loan run for?
* Do you have the option of repaying the loan faster if you have the money?
* Can you consolidate other debts into this loan?
* Does the loan company have a good reputation?
* Do you know anyone who has used the loan lender and can recommend them personally?
Non-conforming home loans can be a God-send at a time of great stress and money worries. However, they are still a binding financial agreement and have to be repaid at a set rate over a negotiated period of time. If you can meet the terms of such a mortgage, it could clear your debts and get you back on the road to financial security. But if you cannot repay the home loan as and when it is due, you could find yourself in a worse state than when you started.