A bad credit score cannot deter you from getting a mortgage.
There are many lenders that offer mortgage with bad credit so that
they can fulfill their financial needs. Moreover, even the government has come
up with some mortgage programs for borrowers with low credit score. Discussed
below are a few steps which when taken care of can increase the chances of getting
a mortgage loan with low credit score:
The first step to get started with is to get a copy of your
credit report and determine whether or not it contains only the right
information. According to the Fair Credit Reporting Act, each one of you can
demand for a free copy of your credit report from any of the three major credit
bureaus namely Trans Union, Equifax and Experian. After scrutinizing the report
if you find that it contains any disputed information, you can request the
bureau and get it corrected then and there. This can greatly improve your
chances of qualifying for a home loan.
The next step is to ensure that you submit true and updated
information about your financial status. It is necessary to understand that the
poor credit rating could be a result of either loss of job, divorce or death.
However, meanwhile you may have succeeded in saving a good amount or acquiring
a new job. As these factors have a direct impact on your credit score it is essential
to report them to the credit bureau and increase your odds of getting your loan
approved.
In addition to this, you need to make efforts towards
mortgage consolidation refinance your debts and paying off of your loan balances in order to keep
your debt-to-income ratio at a minimal level. This will give the lenders the
notion that you are a good borrower and can handle the finances sensibly. Think
on other available options and try to choose a program which will save you a
lot of money on the interest and down payments. Thinking on government backed
loans like FHA loans is a very good alternative for bad credit borrowers as
there are little or no credit restrictions.
Thus, with
little help and some extra effort, borrowers with poor credit history can
reasonably qualify for a home loan.
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