In the United States of today, too many people have bad credit. On the other hand, many lenders now have looser lending rules than they did in the past, which makes it easier for people with bad credit to get a mortgage. So, even if you have bad credit, you might still be able to get a home loan that pays for all of the costs.
Here are some ideas that might help you get accepted:
Online Mortgage Lenders
Don't forget that the lending business is very competitive. Loan officers almost always work on commission, so if the loan doesn't go through, they don't get paid. Lenders are always looking for new customers. So, it's in their best interest to do whatever it takes, no matter how bad your credit is, to get you a loan.
Many online mortgage lenders focus on helping people with bad credit. If you contact more than one lender, you will increase your chances of not only getting a loan, but also getting the best interest rate and loan terms possible.
Tip: Lenders who only lend to people with good credit have lower interest rates than lenders who only lend to people with bad credit. So, you should check out the market early so you can look for different bad credit mortgage packages and have time to compare and choose the one that works best for your current situation and budget.
Make sure your credit report is correct.
It may not be your fault that you have bad credit. There are times when the main credit agencies make mistakes, so it's always a good idea to get a copy of your credit report. You should ask every lender you apply for a loan from for a copy of your tri-merged credit report. You need a tri-merged credit report because loan decisions are made based on the middle credit score. If you only get a credit report from one credit reporting agency, it won't show your credit score accurately. Also, any mistakes might only show up on one or two bureau reports, so you need a full report to make sure there aren't any. Of course, if you find a mistake, you should dispute it right away.
You could also look for old negatives. If you dispute these bad things, they might be taken off of your credit report. Sometimes, collection agencies move your information around so much that the records are a mess. They might not even try to argue against your claim.
Cleaning up your credit report is a quick way to raise your credit score, which will increase your chances of getting a mortgage with lower rates and better terms.
Tip: Mortgages for people with bad credit are a type of secured loan that is usually backed by the house you buy with the loan amount.
Interest Rates
Rates of interest are always changing. Even though they don't change as much as they do in the retail (good credit) market, they do change quite a bit in the subprime market. So, keep an eye on interest rates to figure out when the best time is to get a loan.
Tip: The links below can help you find the best lender for your needs.
