personal loans for people with bad credit really exist?

Many homeowners and real estate investors are asking this question just like many other questions they have to save their real estate from a foreclosure. There are different types of loans that a homeowner can get and one of them can be also a personal loans for people with bad credit. If you have bad credit because you have some debt it’s OK, but if you have bad credit because you foreclose on your home it’s not OK. So we’re trying not get that far.

So what are your options: If you’re looking for personal loans for people with bad credit then option number one will be Short Term Loans also we call them hard money loans. Short term loans are mortgages that being held by private investors and these are the hard money lenders. Hard money lenders will lend almost to any person with bad credit, but you will need in return to show a lot of equity.

How do they measure equity?

Hard money lenders before providing anyone with short term loans they hire an appraiser that will come and look at your property and make sure that first it’s in a good condition. Second the appraiser will look at the comps in your area to determine the actual value of your property. If the appraiser decided that you have 50% equity on your home then you will be qualify for short term loans(depends on the hard money lender of course). So as you see this is a great way to go to get personal loans for people with bad credit.

Another option you have to get personal loans for people with bad credit is to go to the government and ask about the FHA loans programs. Did you know that the government allows up to 4 borrowers on one loan application? Many homeowners don’t know that, but FHA loans can be done for up to 4 borrowers at the same application. Borrowers don’t need to be related, but they do have to state that they occupy the property. I know of homeowners that have refinanced their home under the FHA government guidelines and had horrible credit, but still they have got lower interest rate and saved their home. That’s the way it works with FHA loans.

You need a fico score of at least 600, which is low comparing to the requirements bank have these days. Fico score is a way for the credit bureaus to rate you from 0 to 900(the highest I’ve seen). If your credit fico score is lower then 600 then talk to your broker to do some minor adjustments to the credit, it’s easy and it’s not hard to do. Then after you ‘ve got your credit fico score to 600 now make sure you can qualify with your income ratio.

How do you do that?

You need to calculate all your expenses, car payments, health insurance, utilities, mortgage, phone, Internet,etc. After you know your expenses, now you will need to calculate your income. Expenses divided by the Income equals the DTI(Debt to income ratio). If you’re below 50% ratio then it’s not good and you maybe need another cosigner with you. This person you will add to your mortgage application have to state that he lives in the property to qualify and he can have a low credit fico score.

As I said before, with FHA loans you can bring up to 4 people to the table to help you qualify. Let me refresh your mind. Hard money lenders and FHA loans are both options homeowners have to get personal loans for people with bad credit. If you re one of these people that need personal loans but have a bad credit, read this article again.

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