The most common Mortgage Myths #3

Myth #3: You can’t get a mortgage with bad credit
(and even with poor credit you’ll end up paying way to much, with high
interest rates)
Again, thankfully this isn’t true anymore! With the advent of the internet,
the ease of transferring information, and so much competition - you can get
a mortgage with bad credit. Not only that, some companies even specialize
in bad credit mortgages - with low rates! Don’t worry, we’ll show you some
of these companies a bit later on.
Also, there are currently three major credit bureaus in the US. These are the
companies who record people’s credit history and then sell your credit
report to mortgages companies, banks, etc. Did you know that you could
have one or more bad marks listed on your credit report with one or to credit
bureaus, but (here‘s the important part) Not With The Others!
If you don’t immediately see the significance of that, let me explain. The
bank that’s considering your application gets your credit report from credit
bureau “A”, which contains some bad credit marks from your past, so the
bank declines the loan - or - The same bank instead gets the application
with a credit report from Credit Bureau “B”, which doesn’t contain the
same negative information as company A, so the bank approves the loan!
So, How do I have any control over who gets what report, and use it to my
advantage?
About a year ago, I had a conversation with a guy who’s business
specialized in bad credit mortgages. What he told me really opened my
eyes. He basically said that the banks don’t care what credit report they get
from any of the three major credit bureaus, they’re all highly reputable and
trusted - after all there’s only three of them for the whole US! I can’t think
of any other business with so little competition.
Anyway, because they’re all trusted equally, he would simply pull any
client’s credit report through all three bureaus - and commonly find that one
was missing some (even sometimes all) of the client’s bad credit history. He
was obviously motivated to get the mortgage for the client, because it got
him paid. And, the better the deal he got, the more chance that a client
would decide to take the offer. So, he sent in the credit report that he liked
best, and that was good enough for the banks - and another person with
bad credit gets a mortgage.
Now, remember what we were thinking of a little while ago, what if you
could have your loan shopped around to hundreds, or even thousands of
mortgage companies - by people highly motivated and determined to get you
the best deal?
Even if you had bad credit, the sheer volume of companies that your
information is being circulated to and fought over by many different lenders
would produce a few good quotes. Also, many of today’s comparison
companies have NO CREDIT CHECK at all.