If you have bad credit and want a home loan, there are a few things you can do to improve your chances of getting approved and help you get a reasonable interest rate.
Apply online. There are a few companies on the internet that will take your application and send it to hundreds of lenders. You'll get up to 4 of the best deals you might be eligible for. These offers have already been approved. To lock in an interest rate, you will still need to work with the broker. Also, if you use these companies, they won't check your credit right away, which is a plus. This is good because your credit score goes down a little bit every time it is checked. Instead of pulling your credit, the mortgage company will just ask you to describe it.
Look into down payment assistance programmes. Neighborhood Gold and Nehemiah are two examples of programmes that can help you get a down payment for your loan. Find out what they want and if you could meet those needs. But before you plan on it, make sure the lender will work with them. Some lenders won't work with programmes that help with the down payment.
Apply for a mortgage with two or three different companies - Sometimes, a loan can be done by one lender but not by another. Different loan programmes are available to all mortgage brokers. What one person thinks is impossible, another may be able to do.
Keep Your Credit Score as High as Possible: Don't have your credit pulled over and over, as this will lower your score. Don't forget to pay your bills on time. Also, pay off as much of your credit card debt as you can. This will help your credit score rise. If you have more than one credit card, divide the amount you need to pay off between all of them. Your credit score will be better if you don't use up all of your credit lines.
