|
My experience suggests that people who convince themselves that they can never own a home due to their bad decisions in the past (leading to bad credit) are incorrect. More and more lenders are opening the door to those that have poor credit because they think they deserve a second chance. People around you, who have excellent credit, will get a mortgage much easily than you do but eventually even you will end up getting one. Mortgages and Bad Credit Twenty years ago those with bad credit would be hard pressed to be approved for a mortgage loan. Today, flexible rules and regulations on the lenders' part have not only made this very common but also reached a wider audience. But with bad credit, you may still have a tough time finding a lender. You will find the process a whole lot easier if you know what to expect. First, do not paint a gloomy picture when you will be declined by many people before someone accepts you. When you apply for a loan there are going to be several things that you will need which include: your name, your address, your social security or tax payer identification number, as well as your last tax return. If the lender asks, you may also need to provide proof of a bank account. Since you have bad credit you may also be asked to get some additional references. You will be able to obtain letters of credit or reference from most utilities, which will basically state that you are a customer and you pay your bill. You may also be able to obtain a letter of reference from your school if you have loans with them or even personal references of people who have lent you money in the past. If you fail to get approved for a mortgage due to bad credit (you may get one though) you could look for someone to co-sign with you. A co-signer is allowing for you to borrow their credit score to help you get approved for the loan. While this seems like a simple answer, you need to remember that if you default on your mortgage you are not only hurting your credit, but the credit of your co-signer. Thus, even the person who is co-signing with you on the loan should have this clear in his mind. An alternative whereby a person with bad credit can obtain a mortgage loan is through a larger down payment. Sometimes you will need to have as much as 15 to 20% of the sales price to put down on the home. This shows the lender that you are serious about keeping the home and when they know that you have invested they assume that you will keep your end of the deal by making timely monthly payments. Whether you have a co-signer or a down payment you will find that you can secure a better interest rate than if you don't do either of these things. If you don't have a co-signer and you need a loan for 100% of the purchase price you can expect for your interest rate to be as much as 5% higher than the average. Get bad credit mortgages & bad credit loans. Also get remortgages.
Related Articles -
remortgages, bad credit mortgages, bad credit loans,
| 
