Looking For A Home Loan? Here Are Options If You Have Bad Credit?
With the economy practically in the toilet, it's hard to imagine getting a loan if your credit score is below 650 or so
. However, it is still a possiblilty. Here are a few suggestions you can apply if you have less than perfect credit, but still want to pursue the dream of home ownership.Get a Good Down Payment. Getting a home loan with bad credit is much easier if you have a huge down payment. The larger your down payment, the more serious you appear about this large purchase. Since your bad credit shows that you haven't been serious about your past bills, lenders want something that shows you are serious about your mortgage bill. In addition to that, a large down payment reduces how much money you pay in the long run because you'll undoubtedly get a higher interest rate with bad credit.
Find a Home with Equity. Finding a home that has some equity built into it already is a great way to get a mortgage when you have bad credit. This is largely due to the fact that the equity in your home counts in addition to your down payment. It might be more difficult to find a home with equity, but your real estate agent can help you find some in or around your local area.
Improve Your Credit Score. If you have a mountain of debt, you could wait a decade or more before you pay off all of your bills. But no one wants to have to wait that long in order to buy a home? Instead, find ways to improve your credit score in the next few months. Make sure you don't have any outstanding debts such as book of the month clubs or unpaid magazine subscriptions that could be affecting your credit score. Also, be sure to pay your bills on time for the next six months so it looks like you've "learned your lesson" and you're prepared to be more responsible with your bills.
Get a Second Opinion. Just because you hire a real estate agent doesn't mean you can't talk to other brokers or agents. If your current agent is telling you that you can't get a loan with your credit, there's nothing wrong with talking to other brokers to get a second opinion. Other agents might have "connections" or more information about lenders.
Buying a home is a dream for many people. To some, the dream of home ownership might seem impossible, but there is hope. Luckily, there are some simple steps you can take to buy a home if you get serious about it. Follow the previous suggestions and be on your way to getting out of that rental and into your very own home.
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