All of us want to get rid of the problems associated with the home or apartment renting. It is a touchable dream for all with an excellent and good credit score. When you have a bad credit score getting a mortgage loan may sounds like unachievable one. But it is not so. You can still get Mortgage loans for bad credit. All you need to do id just following some tested proven steps and making sure that everything is in place.
One main thing that every lender will check before lending a mortgage loan is credit score. Anyhow this is not the only one factor. Even if your credit rating is bad, your regular income & your stable job & other assets you have will make the lenders to give a mortgage loan to you. Simply there are so many banks out there which are ready to provide you Mortgages for bad credit and credit cards if you just prove them that you can pay their money back regardless of interest rates.
1. Analyze why you got bad credit?
Very first thing your employer will check when reviewing your application is credit rating. By seeing the report you can know that you have bad credit rating. But have you ever analyzed why?
If you have any erroneous information printed on your report, get that thing removed from your report. It is a factor which brings your credit score down. Before applying for the Mortgage loans for bad credit get an instant credit report and review your report line by line. Upon finding inaccurate credit information you can raise a dispute with the particular credit reporting agency. Have a copy of the legal notice. So that your creditor can see that particular report and can know that you are disputing on the entries.
When the inaccurate entry goes unproved the credit bureau you were raising the dispute will remove the inaccurate entry form your credit report.
2. Lower your debt to credit ratio
Check out what is your debt to credit ratio, if your ratio is high then the possibility to get approved for mortgages will become very less. Your creditor will look how much debt you have currently and what is your income flow every month. If they come to know that you are already dumped with many debts then they won’t provide the mortgage loan even if you have high credit score. It is because mortgage loans are involved with the bulk sum amount.
So what to do now? Try to reduce your debt by paying off as much as you can before approaching the lender for Mortgages for bad credit. If you make some improvement to reduce your debt to credit ratio you can see a mark improvement in your credit rating too.
3. Initial down payment
Normally when you apply montages loan with good credit your down payment will fall anywhere between 5 to 20% of the entire home loan. But when you apply for Mortgages loans for bad credit you will need to pay at least 20% of the total home loan as a down payment.
4. Keep High Total Assets
When you have high balances in your bank accounts along with the liquid assets like investments and bonds you will be seem like less risky people for the lenders. So Mortgages with bad credit is possible if you can show convincing asset levels to your creditor.
5. Consider some alternate financing options
When usual banks refuse to offer you a Mortgage loans for bad credit, you can obtain loan through Federal Housing Administration, seller financing or leasing.
Follow the above steps and get a montages even with the bad credit.