California Bad Credit Lenders
California bad credit lenders are licensed brokers, bankers or lenders that specialize in bad credit, hard money and subprime loans. Unlike traditional mortgage lenders, California bad credit lenders deal with private loans, as opposed to bank or FDIC backed loans. These loans carry much higher interest rates, but offer some good advantages for individuals who find it difficult, if not impossible, to get a traditional mortgage loan.
Types of Hard Money Lenders
There are two basic types of California bad credit lenders. The first controls and manages their own pool of capital, also known as a direct hard money lender. The second is more of a broker, they work with individuals or groups who have money to lend and they match each borrower with the best source of money.
It is difficult to say who is a better bet. It is possible that you will pay less with a direct lender because the broker will not be taking their fee (which usually is in the form of points). However, this is not always the case. A good broker with lots of money sources can sometimes find you a solid source of money at a reasonable rate.
What To Look For In California Bad Credit Lenders
First and foremost, look a lender who offers reasonable loan rates. This is why it is important to compare your loan scenario with multiple lenders who can shop your loan to their sources or let you know their program, points, rates etc. Next, look for a lender who is experienced at getting home loans for poor credit borrowers. If they don't have the experience at placing these loans or connections to money sources, you are probably wasting a lot of time.
Finally, look for a lender who is going to work for you to get you the best loan terms such as little or no prepayment penalties. You want as much flexibility as possible so that you can get the loan, clean up for financial situation and be transition into a subprime loan or traditional mortgage loan as soon as possible.
The Ideal Situation
Let's say you live in California, are having a difficult time, and need to go with a last resort lender. You access a hard money loan for 18 months, during which time they work with you to repair their bad credit. Once the bad credit and FICO score have been raised, they help you get into a subprime or even traditional home mortgage loan.
Bad Credit Interest Rates
Expect to pay between 10-15% annual interest rate on these loans. In addition, most California bad credit lenders charge 4-6 points upfront, this is their fee for brokering the deal.
Counties in California include Alameda, Alpine, Amador, Butte, Calaveras, Colusa , Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake, Lassen, Los Angeles, Madera , Marin, Mariposa, Mendocino, Merced, Modoc, Mono, Monterey, Napa, Nevada, Orange, Placer, Plumas, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Ventura, Yolo and Yuba .
Additional cities and areas in California include Bakersfield, the Bay Area, Fresno, Hanford, Inland empire, Mohave, Orange County, Palm springs, Santa barbara, Santa maria and Visalia-tulare.