Recent Credit Event Loans
Many Americans struggle to maintain good credit scores. Whether you recently declared bankruptcy or or defaulted on a debt, these types of events can have a major impact on your credit score. A poor credit score, in turn, can make it very difficult to secure the financing you need to purchase a home.
If your credit was negatively impacted by a recent event, you might want to consider taking out this type of loan. Griffin Funding’s recent credit event loans allow borrowers with relatively poor credit to qualify for a mortgage and buy a home. Our non-QM credit event loans have flexible qualification standards, so you can still pursue your home-buying goals.
Can You Get a House with Bad Credit?
Yes, you can buy a house with bad credit. Many people have gone through credit events that have a negative impact on their credit score, such as filing for bankruptcy or facing foreclosure. These events can have lasting effects on your credit, and make it hard to secure traditional financing.
If you have had a recent credit event, then it may seem impossible to secure a mortgage with many of the lenders on the market. For those with credit scores that fall below 680, certain financial institutions may demand unreasonable terms with excessive fees and high interest rates. However, it’s important to keep in mind that you do have options when it comes to securing a home loan, even if you have poor credit.
While 600 credit score home loans may sound completely out of the question for some lenders, Griffin Funding is willing to work with borrowers who have experienced credit problems due to unforeseen circumstances. Everyone makes mistakes and faces adversity from time to time. But we believe that a single setback that has affected your credit should not get in the way of being able to purchase real estate, whether that be as an investor or a homeowner.
What Is a Recent Credit Event Loan?
A recent credit event loan is a type of lending service available to those who have undergone an event that damaged their credit score. Since it can be next to impossible to secure a traditional mortgage with a bad credit score, recent credit event loans act as a more accessible alternative. These types of loans offer flexibility in terms of who qualifies and the loan terms set forth between the lender and borrower.
What Qualifies as a Credit Event?
A credit event is any occurrence in your borrowing history that typically has a negative effect on your creditworthiness or ability to borrow. Recent credit events may include:
- Filing for bankruptcy: Depending on the type of bankruptcy you declare, it can affect your credit score for as long as seven to ten years.
- Foreclosure, deed in lieu, or short sale: Failing to keep up with a mortgage or other type of home loan.
- Defaulting on a payment or loan: A failure to pay back a loan or accrued debt according to the terms of the contract.
- Restructuring debt: A decrease in the principal amount to be paid (changing the mortgage in exchange for a percentage of the house sale) or postponement of payment obligations (deferment).
- Obligation acceleration: If a debtor has defaulted on a loan and the payment becomes due.
- Repudiation/moratorium: A refusal to honor the terms of an agreement.
One of the most common reasons many people deal with poor credit today is because of The Great Recession, which resulted in millions of Americans falling into the 550-649 FICO range, or even lower, in the following years. Due to job losses and mounting unpaid credit bills, some individuals are still struggling to recover their credit today.
Similarly, those with large amounts of student loan debt commonly find it difficult to make payments as they try to adjust to the rising costs of living. As such, many are defaulting and, in states like California, thousands are filing for bankruptcy. In many cases, these circumstances are creating complex financial situations in which borrowers that were previously considered reliable are unable to maintain good credit.
How Soon Can You Qualify for Non-QM Credit Event Loan?
Griffin Funding offers bad credit home loans as soon as one day out from your bankruptcy, short sale, deed in lieu, or foreclosure. With that being said, typically the more time you allow to pass between the credit event and applying for a mortgage, the better the loan terms you can qualify for.
Even just waiting for one or two years can make a significant difference in interest rates, which, in the long run, can mean thousands in savings. In general, loan terms are best at about four years out. However, if you need to buy now, Griffin Funding can still work with you to find a solution.
At Griffin Funding, we offer highly personalized loans with competitive interest rates when compared with other lenders. Working together with one of our knowledgeable loan specialists, we can review your financial situation, assess your needs, and come up with a recent credit event loan that’s tailored to your circumstances.
Are There Ways to Improve Your Credit & Loan Terms?
If you are just in the beginning phases of planning to buy a home or starting your real estate investment business, you may have time to improve your credit before it is time to apply for your home loan. Some of the ways in which you can improve your credit include:
- Make payments on time
- Pay off credit balances to lower debt-to-income ratio
- Review your credit history and dispute any mistakes
- Track your credit score on a regular basis
- Keep your credit usage as low as possible
While credit scores are important, there are other factors lenders can evaluate when qualifying you for a recent credit event loan instead of a traditional mortgage. Other determining factors in your loan terms may include the size of your down payment, your personal savings, steady employment history, or even a proven record of making timely rent payments.
How Does Bad Credit Affect Loan Terms?
Financing is complex, however, one thing that is fairly straightforward in terms of loans is FICO requirements. Traditionally, borrowers with better credit scores (800-850 being the highest range) will qualify for better interest rates. And inversely, borrowers with average credit scores (600-680) or lower are usually saddled with higher interest rates or even barriers to entry that prevent them from securing a loan altogether. As such, it is typically advantageous to have the best possible credit score when applying for a loan to qualify for lower interest rates, so that you can save significantly over the life of the loan.
However, some borrowers may be in need of financing and don’t have the time or the means to significantly alter their credit score. Oftentimes, these individuals have credit scores that have been damaged through no fault of their own, such as unexpected medical bills or financial crises. In these cases, certain financial institutions may take advantage of their limited options, implementing high interest rates that will bring in substantial profit over the course of the loan, but make it more difficult for individuals to focus on recovering their credit.
At Griffin Funding, we understand that many responsible borrowers out there have experienced detrimental credit events despite their best efforts to meet their financial obligations. Whether they have fallen on hard times or faced financial adversity, we believe that people are deserving of a second chance to invest in or own real estate. This is where our recent credit event loans come in—with a mortgage tailored to your financial position, you can take the next step toward purchasing a home.
How to Get a Home Loan with Bad Credit
If you have poor credit but need financing right away, reach out to Griffin Funding. Speak with one of our loan specialists to see whether you qualify for a recent credit event loan. If you do, we can work with you to determine the best lending option given your circumstances. Our lending process leverages innovative technology to make the application experience as straightforward and convenient as possible for you.
Using our cutting-edge technology, skilled team, and customer-focused approach, we are often able to complete the loan process within 30 days or less. As you likely know, affordable listings typically go quickly on the market, so our process helps you take advantage of the best real estate opportunities.
The Application Process
To apply for a recent credit event loan, you will need to:
- Schedule a discovery meeting with one of our loan officers where they will evaluate your circumstances.
- Complete a loan application over the phone or online.
- Lock in your rate based on the agreed-upon terms.
- E-sign and return the initial application and disclosures.
- Provide all requested supporting documentation.
- Schedule an appraisal and pest inspection (if applicable) for the property.
- Review all the final loan documents and meet with the notary to sign them.
When applying for your home loan, keep in mind that the more responsive you are and the faster you can return the necessary documentation, the more efficiently we can act on our end.
Griffin Funding’s Non-QM Mortgage Programs
Our non-QM mortgage programs are often seen as an appealing option to those with poor credit. Some of the non-QM mortgage programs we offer include:
- Bank statement loans: The only form of income verification needed for this loan is a bank statement.
- Debt-Service-Coverage-Ratio (DSCR): The only form of income verification needed for this loan is the rental income on the property.
- Asset-based loans: This type of loan uses liquid assets as income.
- Foreign national loan: These loans are designed for noncitizens hoping to purchase real estate in the U.S.
- Interest-only loan: Only pay interest on the loan for a predetermined period of time (typically five to ten years).
Perhaps you don’t know which of these loans is best suited for your situation. In that case, don’t hesitate to reach out to Griffin Funding. One of our loan specialists can help you determine the best recent credit event loan for you.
Find Out If You Qualify for a Recent Credit Event Loan
If you have poor credit, then a recent credit event loan may be useful in helping you purchase a home. Contact Griffin Funding today to get expert advice on the right recent credit event loan for you and get started with the application process. Feel free to call us at (855) 394-8288 and get on the phone with a loan specialist right away. Or, you can complete an application online at your own convenience.