After a recent or past foreclosure, it's easier than you might think to buy a new home. Some people who have owned a home before are afraid to apply for a mortgage. Many people think that mortgage lenders will immediately turn down their loan request because of their past. On the contrary, many lenders will give people with bad credit mortgages and loans. So, it is possible for you to get a new home loan.
How to improve your credit score quickly
Rebuilding credit is the most important thing to do after a foreclosure. Your credit score will go up a lot in a year if you get a mortgage loan and make payments on time. Even if you can't get a low interest rate right after a foreclosure, you can refinance in a couple of years to get a low rate mortgage if you make all your payments on time and show that you have good credit.
If you want to get a low-rate mortgage for your first home, try to improve your credit score before you apply for a loan. You can quickly raise your credit score by applying for new credit accounts. Get a secured or unsecured credit card, store card, etc. if you can. Make payments on time every month for the next 12 months. If you pay off the balance every month, it shows that you can be responsible with credit. When rebuilding your credit, check your credit score and report from time to time for mistakes.
How to Choose the Right Lender
It's important to choose the right lender for your new home loan. Many people who want to buy a house don't look around for a mortgage lender. Also, many people don't think about other ways to get money, like mortgage brokers or subprime lenders.
Traditional mortgage lenders won't give you good rates if you've gone through a foreclosure or have bad credit. These lenders prefer people with good credit. If your credit score is low, it's likely that you won't pay back the loan. So, applicants with bad credit have to pay a lot more in fees and interest.
After a foreclosure, you should talk to a mortgage broker online. Brokers want to help you find the best loan package for your needs. The process is also very easy and quick. After you give a mortgage broker information about your income, job, and credit, the broker will find appropriate loan programmes and give you quotes from a number of lenders. After carefully looking at the quotes, you can choose a lender or turn down the offers.
