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How To Get A Home Mortgage Loan When You Have Bad Credit?

If you have bad credit, getting a home mortgage loan nowadays is pretty easy. Here are some tips to better your chance of getting a mortgage loan.

Tip #1 â Raise money for down payment

There are many lenders who still grants people with bad credit. The only problem is the high interest rates you have to repay. Try to raise some money for the down payment as it can help cut at least 2 to 3 percent off the interest rate.

If possible, I would recommend to wait until you have the money for the down payment before seeking a bad credit mortgage loan. Give yourself 6 to 8 months to raise the money.

Tip #2 â Real Estate with Equity

If possible, try to purchase a home that still has some equity value in it. The reason is because most lenders consider homes with equity to have some value and itâs equivalent to you paying the down payment. It would be a lot easier to get refinancing on the home. You might want to consult your property broker if the home qualifies for it.

Tip #3 â Talk to other brokers as well

Just because you engage a mortgage broker does not mean you canât speak to other mortgage brokers. Some mortgage brokers feel you depend on them and may tell you that you canât get this loan and that loan because you donât qualify for this and that. Well, the truth is some brokers may have good relationship with the lenders and may allow some leeway in getting your loan approved. Also some brokers only specialize in one or two types of loans and may not be able to help you. So the best way is to ask as many brokers as possible before deciding which lender to go to.

Tip #4 â Fix an agreement with the seller

Sometimes it may be able to negotiate with the seller if they are willing to carry a second mortgage loan for the house. You can establish an agreement where you would repay them a fixed amount every month based on the price of the house. It would best if you want to attempt this to fix the time period to less than 5 years. Any longer and the seller may feel he/she is locked into a long term contract and may back out.

Tip #5 â Improve your credit score

This is the most obvious and it really isnât that hard to improve your credit score. You got to have discipline and keep your finances in check. Pay your monthly bills and credit card bills on time and do not have too many credit enquires. Avoid taking more loans such as credit cars, auto loans etc if you know you are planning to buy a house soon.

Just because you have bad credit should not stop you from getting a new home. There are plenty of lenders who are still willing to give you a loan and you will better your chances of succeeding if you follow the tips above.

Ricky Lim works in a finance company specialising in Home Refinancing Loans. Visit his site for countrywide home loans rates and free home loan calculator

This article is free for republishing
Source: http://www.articlealley.com/article_108439_19.html

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