If you are currently involved in a pending civil lawsuit, there is a possibility that you could get a home loan, but it is not likely. The financial responsibilities that come with pending lawsuits are often seen as a risk to mortgage lenders.
If the lender believes you are a high-risk applicant, they may dramatically increase your interest rates or refuse to approve your borrowing request. However, that does not mean you are not without options when you are hoping to access the funding you need to purchase a home. Contact High Rise Financial to learn about pre-settlement funding and how it could help you purchase the home of your dreams.
In This Article
How Risk Is Assessed
Since homes often cost a considerable amount of money, the amount of money you are required to take out for a mortgage is also high. For this reason, mortgage lenders are required to review an applicant’s creditworthiness and determine their level of risk. The level of risk refers to the likelihood that you would be willing to default on the loan or fail to make the necessary payments.
If you were to default on your mortgage, it could have a devastating impact on your credit report and score, destroy your financial reputation, and result in tremendous financial losses for the bank or financial institution. For this reason, mortgage lenders are often unwilling to provide funding to someone who they anticipate will default on their mortgage.
To assess the risk of a particular mortgage applicant, the financial institution will review your employment record, credit report and score, and credit references. Additionally, lenders will be looking for your debt-to-income ratio to determine whether your debt represents a significant portion of your regular income.
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Why Traditional Mortgage Funding Requests Are Denied
There are many reasons why traditional mortgage loan requests may be denied. However, it is almost worse if your mortgage application is approved but you are stuck with an outrageous interest rate. Generally, any credit score in the 500s will be considered a red flag to mortgage lenders.
You must typically have a fair credit score, Somewhere between 580 and 669 according to Capital One, to qualify for a mortgage loan with a standard interest rate. It is unlikely for mortgage lenders to use your anticipated civil claim or personal injury settlement payout as collateral for your loan.
If your attorney loses your case and you are unable to make your mortgage payments, the financial institution is at risk of losing the amount they loaned you.
How to Get the Funding You Need as Soon as Today
Fortunately, despite the fact that the bank might not be willing to take your personal injury settlement into consideration, our loan specialists at High Rise Financial are. Instead of taking on a traditional loan, you can request pre-settlement funding. Unlike traditional loans that will require you to prove your creditworthiness, have a strong credit score, and prove a verifiable source of income, pre-settlement funding only requires an anticipated settlement payout.
It is difficult to say how much we could authorize in pre-settlement funding without having reviewed your application. Typically, loan specialists award approximately 20% of the anticipated settlement amount.
However, we have also authorized as much as $1 million in pre-settlement funding. This means if you are hoping to purchase your home or access a down payment, you could do so through a lawsuit loan.
Lawsuit Loan Eligibility
You may have concerns that you will not qualify for legal funding. However, as long as you are 18 years of age or older, are working with an attorney to pursue the compensation and damages you deserve, and have an anticipated payout, you may qualify for legal funding.
You will not need to get into further debt if you can access your settlement funds in advance. If you are currently receiving a structured settlement payment, you may be able to sell your future payments to cover your home purchase. There are many options that may be available to you that do not involve working with a financial institution, paying compound interest, and continuing to struggle financially.
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Spending and Paying Back Your Pre-Settlement Funding
Once we authorize pre-settlement legal funding, you can use the money however you like. Since you were interested in a potential home alone, you might forgo the loan and purchase your home in cash. You might also use these funds to furnish your home, purchase groceries, set up your utility in Internet expenses, and otherwise rebuild your life after the trauma of the litigation experience.
Once your settlement funds come in, your attorney will use them to cover your attorney’s fees, make sure your medical debts are covered, and pay back your pre-settlement loan. If your lawyer does not win your case, you do not need to worry about High Rise Financial coming after you for an outstanding debt. We absorb the risk, and you never have to worry about wage garnishment or other unseemly debt collection attempts.
Contact Us if You’re Ready to Apply
When you are ready to purchase your home but do not want to deal with the hassle of a mortgage lender, obtaining an advance on your legal funds may be in your best interests. To begin, you can:
- Gather the documents you need to fill out our application
- Apply now and complete the application in full
Once you have submitted your application, our loan specialists will reach out to your lawyer to discuss your case. We will need to know how long it will be before your settlement is coming in, your anticipated payout amount, and other details. From there, once we have approved your application, the money will be sent to your bank in just hours.
Our High Rise Financial Loan Specialists Are Here to Help
If you are dealing with a pending civil claim, it is unlikely mortgage lenders will be willing to grant your borrowing request. However, by obtaining pre-settlement legal funding, you could access a portion of your civil funds in advance so you can purchase the home of your choosing.
Learn more about how lawsuit loans work and apply today when you contact High Rise Financial through our convenient contact form or by phone.