Bad Credit and 50 Year Mortgages

Summary

Borrowers with bad credit may still be eligible for 50 year mortgages.

Here's some help in understanding what a mortgage lender will consider that will help you get approved.

Basics

There are mortgage lenders that offer 50 year mortgages to borrowers with bad credit, and they will look at your mortgage application and analyze the following:

• borrower income and assets
• equity in the property

Borrower Income and Assets

Lenders require a borrower to declare their income and assets on the mortgage application.

Lenders allow a borrower to do this in two basic ways:

• stated loan
• full documentation

A stated loan is one where a borrower states but does not prove their income and asset level. The bank does not require proof of either.

A full documentation loan is one where the lender receives many different documents from the potential borrower, including:

• pay stubs
• tax returns
• bank statements
• investment accounts

The more documentation you show on your application the better your interest rate is likely to be.

If you can document your income and assets you will be able to make a stronger case for a 50 year loan with bad credit. It's not required though.

Loan terms can be for many years, including:

• 15 years
• 30 years
• 40 years
• 45 years
• 50 years

Some lenders also offer loan terms with other lengths.

So far the longest available mortgage loan term is for 50 years.

Equity In Your Property

This is the amount of equity that will remain in your property after the loan is done.

The more equity you have in the property the more likely you are to be approved.

If your new loan is only 70% of the value of your property you are more likely to be approved than if your new loan is 95% of the value of the property.

Make sure you know your current appraisal value. Keep up with current valuation trends in your area to make sure you have a good idea of your appraisal value, although you will only get a definitive opinion from an appraisal report.