Adverse Credit Mortgage Loans – How to Get Approved With Poor Credit
Windowofworld.com – If your credit is less than perfect, you may think that home ownership is just a dream. But the truth is, you can get a mortgage loan even if you have a low credit score. You’ll have to make some trade-offs, but you can get approved for a mortgage loan – even with bad credit – if you:
Choose a “special” loan
Certain mortgage loans – such as FHA loans or VA loans – are specifically designed to help Americans achieve their dream of home ownership. Because of this, they have lower down payment requirements and more lenient approval criteria, so even those with a shaky credit history can get one of these loans. You’ll need to meet certain criteria – such as Veteran status or income restrictions – and you may have to pay a little extra in your interest and fees as well. Most mortgage lenders will be able to help you find one of these loans.
Save a bigger down payment
In general, the more you borrow, the higher your risk to the lender. So if you have bad credit, it’s a smart idea to save as much of your down payment as possible, even if this means waiting several years to buy a home. If, for example, you wanted to buy a house for $ 150,000 and you only had $ 10,000 as a down payment, you would have to borrow $ 140,000 from your lender! But if you have $ 50,000 as a down payment, you only need to borrow $ 100,000. From a lender’s point of view, a larger down payment makes you a more attractive borrower, which means you are more likely to be approved for a mortgage loan.
Get special help
Many states, localities and other organizations have programs designed for “special needs” borrowers. These programs can help you qualify for a mortgage even if your credit is poor or your down payment is not large. Programs vary: some are like grants, which put extra cash on your deposit, while others are actual mortgage lenders. Search the Internet for mortgage assistance programs in your area.
Don’t let a bad credit history stop your dream of owning your own home. There are many options available for mortgage loans if you’re willing to do a little research.