Get a home loan with poor credit
Is your poor credit history stopping you from applying for a home loan? Getting a home loan with a bad credit is not easy and perhaps is impossible, especially in the present credit scenario of the country. There are various predatory loan lenders who give loan to members with poor credit but these loans are often dangerous as they involve penalties and fee amounts. You may even end up in foreclosure with subprime mortgages.
Follow the steps below to get a home loan with a bad credit:
Check your credit rating
If you have decided to take a home loan, then it is recommended that check your credit rating, especially as in most cases, the credit score is not as bad as we assume it to be.
Raise your credit score
Raise your credit score by paying off your credit card bills on time. Also make sure that your credit card account is always current.
Plan a budget
It is very important that you create a budget and determine on how much you can afford for your monthly mortgage payment after improving your credit score. In case you have a huge debt, you will not be able to put extra money as home loan.
Save money for a large down payment
Ensure that you have sufficient funds for margin money as the more money you invest in your home in the form of down payment, easier it is for you to get a home loan in spite of a low credit score. A large down payment amount will make the lender feel that you have some sort of financial responsibility and this will lessen your monthly payment amount.
Prepare to have a loan with high interest
Be prepared for a home loan with higher interest. This is the penalty for having a low credit score.
Keep a track
Make sure that you keep a track of the closing costs, penalties, points and additional fees which are offered to you during home loan.
Seek a co-signer
In case you have z really bad credit, you can seek someone to co-sign your home loan application. If the your co-signer has a good credit history, it may help you offset your score.
Opt for a home loan with fixed interest rate
It is always advisable that you opt for a home loan with fixed and lower interest rate.
