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By Carrie Reeder
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. To see our list of
recommended bad credit mortgage lenders, visit here: www.abcloanguide.com/
lessthanperfectcredit.shtml (http://www.abcloanguide.com/
lessthanperfectcredit.shtml)
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. For your reference, here are the links to all 3 major credit
bureau’s websites: www.abcloanguide.com/credithelp.shtml (http://www.
abcloanguide.com/credithelp.shtml)
If you really do want to get into a home, don’t let bad credit stop you. There
are lenders out there who can help you, it just takes some persistence. Apply
with multiple lenders. Like I said, apply with mortgage services that
specialize in bad credit mortgage loans and will submit your application to
multiple lenders with only having one credit inquiry.
Carrie Reeder is the owner of www.abcloanguide.com (http://www.abcloanguide.
com). ABC Loan Guide is an informational loan website with informative
articles and it has recommended lenders to help you get the best mortgage
service possible.
carrie@abcloanguide.com (mailto:carrie@abcloanguide.com)
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