Will a Bad Credit Mortgage Haunt Me Later in Life?
Congratulations on turning your spending habits around, paying down debts, and saving money for a home loan. How long should you wait, and will certain loan types scar your credit report for longer? There are many ways to secure funding or find a bad credit mortgage when your credit score is less than pristine.
If you have been working hard to repair your credit and fulfill the dream of owning a home, you may be wondering if the type of mortgage you get will affect your credit down the line. In general, the type of mortgage, standard bank issues, or a bad credit mortgage that is alternatively funded will not affect your credit score in the long run. Talk to a BMC Mortgage and Investments advisor today!
What is a Bad Credit Mortgage?
A bad credit mortgage can encompass a number of funding resources. Here are some examples:
- Use a co-signor to obtain funding from a banking institution.
- Use collateral to obtain funding from a banking institution.
- Use alternative funding sources such as a private loan or an alternative institution.
In most of these above cases, your loan status will be reported to the major credit bureaus. As long as your loan is reported to the credit bureaus with payments always made on time, your bad credit mortgage will not hurt your credit report over the long run.
How Can a Mortgage Hurt My Credit?
No matter what your credit score is, when you take out a mortgage, it will drop. Especially if this is the first time, you have taken on a mortgage. Think about it this way; your credit score reflects how good you are at paying people back the money you owe them.
As long as you keep the mortgage and make your payments on time, your credit score will increase. This shows that you can pay your loans back and are a good person to lend money to.
Can a Bad Credit Mortgage Help Me?
In the long run, any mortgage will help your credit as long as you make all your payments on time, and the entity you borrowed money from reports your payments to the credit bureau. Call BMC Mortgage and Investments today to learn more about your options regarding bad credit mortgages and financing.