Home loans for people with bad credit

Getting a bad credit home loan has never been easier than today. Here are some tips to help you 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 buy it, you may find it easier to obtain financing for that property. For the lender, it can be almost as good as having some kind of down payment on the property. Some lenders will consider the relationship between the loan and the value of the property when considering the loan. Talk to your mortgage broker and see if this factor could help you qualify.

Try creative financing – See if the seller would be willing to transfer a second mortgage on the house. This is where you enter into a contract or agreement with the seller in which you will pay monthly payments, including interest of, say, $ 150 / month on $ 10,000 of the property’s price, as a second mortgage. Then, to make it nice for the seller, you might agree that the full amount should be paid in full within 2 years or so. That should give you plenty of time to refinance and then the seller won’t feel permanently trapped in the contract.

Save for a down payment – There are lenders who can 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 the down payment. Sometimes it may be better to wait 3-6 months to get a new home loan if that means the difference from having a down payment. The interest rate could be 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.

Shopping around – There are some mortgage brokers 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 to other runners, 10 minutes later you could be talking to someone who knows how to help you, no problem. Most runners feel that if they can’t help you, no one can. However, the irony is that each broker is varied in the types of loans they can make. Some brokers have relationships with flexible mortgage lenders and others do not. I recommend applying for mortgage services online who will send your application to various lenders. That way, your credit is only drawn once, and you can analyze offers from multiple lenders. To see our list of recommended bad credit mortgage lenders, visit here.
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Improve your credit score – There are some really easy ways to improve your credit score without spending too much time on it. The top 3 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 improve your score. Keep the number of credit inquiries low. Too many inquiries can hurt your credit score. If you want to buy a home, don’t apply for credit cards, auto loans, or any other type of loan if you can avoid it. For your reference, here are the links to the top 3 credit bureau websites: www.abcloanguide.com/credithelp.shtml

If you really want to break into a home, don’t let bad credit stop you. There are lenders that can help you, it just takes a little persistence. Apply with multiple lenders. Like I said, apply with mortgage services that specialize in bad credit home loans and you will submit your application to multiple lenders just by having a credit inquiry.

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