Getting A Bad Credit Mortgage
It is most people's dream to own their own homes, but this is something that requires money. Majority of property hunters nowadays have poor credit history and their approval chances are low as a result. But despite this, getting a bad credit mortgage is still possible.
How To Get Approved For A Mortgage Loan with Bad Credit
In order to maximize your chances of obtaining a home loan, you need to prepare your application submission. Having a good credit rating is an advantage, but it is not the deciding factor for approval. Even an applicant with a terrible loan repayment history can get the finance he or she needs if their current financial situation is good.
If you have a large down payment, you are more likely to get accepted by a lender. You may have inherited some money recently, or your family member is willing to help. To increase your chances of obtaining a mortgage, try to come up with a sizeable down payment so that you can get attractive terms.
Some lenders overlook poor credit history of their applicants if they have demonstrated an improvement in their spending habit. Another way to land a good offer is by applying directly to your bank, especially if you have been a long term customer. As long as you have at least 20 percent down payment, and a steady income, there is no reason why your application would be rejected.
By looking over your FICO score to see which areas you can work on, you can spot any inaccuracies that show up on the report and work to improve your credit. The way to do this is by consolidating all or some of your existing loans and seeking the guidance of an experienced financial advisor. As the debt to income ratio is 40 percent, most lenders will not accept applications from people who have large debts.
Your poor repayment history means you should expect to pay more interest towards your bad credit mortgage or home loan. Be prepared for such an offer as you will not be able to find a better deal unless your rating is improved. Most lenders ask for a guarantor who has good credit. This person can be someone in your family or a friend. You may qualify for a low interest home loan if you can introduce a co-signor. If you default on your payments, your co-signor will be responsible so make sure you can fully rely on the person you introduce to your lender.
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