NONCONFORMING LOANS

Financing For Those With Credit Issues

NOTE: We are not offering this product at this time!

 At Centurion Mortgage, we can provide financing for borrowers that have damaging credit issues.  Often, people that think they have terrible credit are surprised to discover that we can fit them into a low interest, low down payment FHA loan, so for those borrowers the nonconforming loan route isn't necessary.  For those borrowers that genuinely have serious credit problems that cannot be dealt with through traditional financing vehicles, nonconforming loans provide a very lenient option for obtaining financing for a home purchase or refinance.

    If you have credit issues, do not be afraid or embarrassed to call us.  We handle such loans all of the time, and our goal is to simply get you the best financing that we can given your circumstances.  We are out to do loans, not to lecture or make you feel worse about your situation. Centurion Mortgage has several nonconforming loan products designed to get borrowers with credit issues into a house.  If such a borrower already owns a house and is looking to refinance to get some cash out, then our nonconforming products help as well.  The key to getting financed with bad credit on either a purchase or a refinance is the matter of down payment or equity, and as long as a borrower has that, the credit problem can be overcome.   

    A borrower with poor credit needs a larger down payment or a good equity position to qualify for financing.  Based on the size of the down payment or equity (usually a minimum of 10% is required, though not always), and the borrowers middle credit score, an interest rate can be determined. The nonconforming rate sheet is a basic grid whereby the credit score makes up the vertical column, and the down payment makes up the horizontal column.  To find the rate, we find the place where the credit score and the down payment meet. 

	10%	15%	20%	25%
560-580	8.25%	8.00%	7.75%	7.50%
540-560	8.50%	8.25%	8.00%	7.75%
520-540	8.75%	8.50%	8.25%	8.00%
500-520	9.00%	8.75%	8.50%	8.25%

    The rates in the above table are simply examples are not to be confused with the actual rates being offered at any given time: you can call for a current market quote.  The example table has been provided to illustrate the basic outline of the pricing grid.  When we deal with a borrower that has credit issues, we simply go off of the score and the down payment to find the rate.  We do not get into lengthy credit explanations or require delinquent accounts to be paid off (certain items such as Federal tax liens must be paid off - they affect title).

    The nonconforming loan products have higher rates that standard loans.  The loans are available as 30 year fixed rate, or as a loan that is fixed for 2 years, then adjustable after that. If a borrower appears to be able to get their credit situation straightened out within the 2 year period, then the 2 year fixed rate loan works just fine.  The loan allows the borrower to meet their mortgage needs in the short run with a fixed monthly payment for 2 years.  After 2 years, the loan is simply refinanced into a much lower standard loan product provided the credit issues have been resolved.  For borrowers that anticipate ongoing credit problems, the 30 year fixed rate loan is the right choice.  The 2 year loan offers a lower initial rate, but then adjusts after 2 years, so a borrower needs to be prepared to refinance or accept an increasing payment.  The 30 years product has a higher rate, but it never needs to be refinanced. 

    This is a simplified description of these products, but it does get the general idea across.  If you have major credit issues, but also have at least 10% to put down on a home, or if you have decent equity in an existing home and want to refinance to get cash out, give us a call to discuss the nonconforming loan option.  The underwriting is incredibly lenient, and it is a good option for many credit challenged borrowers with equity.