Home loans for people with bad credit

Getting a home loan with bad credit has actually never been as easy as it is today. Here are some tips to help improve your chances of success:

Find a good real estate deal – If you can find a property that has some equity when you buy it, you may have an easier time getting financing for that property. For the lender it can be almost as good as having some type of down payment on the property. Some lenders will consider the relationship between the loan and the value of the properties 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 make a contract or agreement with the seller that they will pay you monthly payments, including interest of, say, $150/month on $10,000 of the price of the property, like a second mortgage. Then, to make it nice for the seller, maybe put in the agreement that the full amount must be paid in full within 2 years or so. That should give you plenty of time to refinance and then the seller doesn’t feel permanently locked into the contract.

Save for a down payment – There are lenders that can qualify you for 100% financing, even with low credit scores, but your interest rate will be much lower if you can put 3-5% down. If possible, try to save as much as possible for a down payment. Sometimes it may be better to wait 3-6 months to get a new home loan if it means the difference of having a down payment. The interest rate could be quite a bit better because of that factor. However, if you don’t want to have a down payment, you can always refinance later at a lower interest rate.

Shopping around – There are some mortgage brokers you’ll talk to and they’ll say, “I can’t help you, and if I can’t help you, no one can help you.” But, if he persists in talking to other runners, 10 minutes later he could be talking to someone who knows how to help him, no problem. Most brokers 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 he can make. Some brokers have relationships with flexible mortgage lenders and some do not. I recommend applying online to mortgage services that will send your application to multiple lenders. That way, your credit is only drawn once and you can review offers from multiple lenders. To view our list of recommended bad credit mortgage lenders, visit here recommended bad credit
mortgage lenders

Improve your credit score – There are some very easy ways to improve your credit score without spending too much time on it. All 3 major 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 help 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, car loans, or any other type of loan if you can avoid it. For your reference, here are links to the top 3 credit bureau websites: www.abcloanguide.com/credithelp.shtml

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