Tips To Get Home Mortgage Loans
With
Bad Credit
Getting a home loan with bad credit has actually never been
easier than it is today. Here are some tips to help improve your chances of
success:
Find A Good Real Estate Deal – If
you can find a property that has some equity in it when you purchase it, you may
have an easier time getting financing on that property. To the lender it may be
almost as good as if you had some kind of down payment on the property. Some
lenders will consider the properties loan to value ratio when they consider the
loan. Talk to your mortgage broker and see if this factor could help you get
qualified.
Try Creative Financing – See if
the seller would be willing to carry back a second mortgage on the home. This is
where you set up a contract or agreement with the seller that you will pay them
monthly payments, including interest of, let’s say, $150/mo on $10,000 dollars
of the price of the property, as a second mortgage. Then, to make it nice for
the seller, perhaps put in the agreement that the entire amount is due in full
within 2 years or something. That should give you plenty of time to refinance
and then the seller doesn’t feel permanently locked into the contract.
Save For A Down Payment – There
are lenders who may be able to qualify you for 100% financing, even with low
credit scores, but your interest rate will be much lower if you can put even
3-5% down. If possible, try to save as much as possible for a down payment.
Sometimes it may be better to wait about 3-6 months to get into a new home loan
if it means the difference of having a down payment. The interest rate could be
quite a bit better because of that factor. However, if you don’t want to have a
down payment, you can always refinance later for a lower interest rate.
Shop Around – There are some
mortgage brokers out there that you will talk to who will say, “I can’t help
you, and if I can’t help you, no one can help you.” But, if you persist in
talking with other brokers, 10 minutes later you could be talking to someone who
knows a way to help you, no problem. Most brokers feel that if they can’t help
you, no one can. However, the ironic thing is that each broker is varied in the
types of loans they can do. Some brokers have relationships with flexible
mortgage lenders and others do not. I recommend applying online to mortgage
services that will submit your application to multiple lenders. That way, your
credit is only pulled once, and you can analyze offers from multiple lenders.
Improve Your Credit Score – There
are some really simple ways to improve your credit score without spending too
much time at it. All 3 major credit bureaus now have areas on their websites
where you can dispute incorrect items on your credit. The process is very quick
and easy. Make your current payments on time to help your score. Keep your
number of credit inquiries down. Too many inquiries can hurt your credit score.
If you want to buy a house, don’t apply for any credit cards, auto loans or any
other type of loan if you can avoid it.
By
Carrie Reeder
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