Getting a mortgage loan with bad credit can be hard, whether you are refinancing, getting a second mortgage, or getting a home equity loan. If you have credit problems, the lender will put more weight on the other things you have to offer to decide if you can get approved.
Here are some things you can do to improve your chances of getting a mortgage loan:
Think about how you can come up with a down payment. Even a 2-3% down payment can affect your ability to get a mortgage loan or help you get a lower interest rate on your loan. You can come up with a down payment in many different ways. For a down payment, it can be worth saving for a few extra months or even a year.
Lenders will look closely at your income and job history. If you have bad credit, lenders will want to make sure that your income is enough to cover all of your minimum payments. The better you are at your job, the longer you have been there. If you've been at your job for less than a year, you might want to wait a little longer before applying for a mortgage.
Lenders will want to see that your most recent debt payments were made on time. This is true even if you have had credit problems in the past. They will care most about how you pay for things like your car, utilities, and credit cards. If you make those payments on time now, the lender may be willing to look past problems in the past.
Try to improve your credit score by using techniques. There are many tips online that can help you improve your credit score. There are 16 ways to get a better score on this quiz. You can dispute any mistakes that are on your credit report online for free. This can sometimes start to raise your score in 30 days or less.