How To Get A Home Loan When You Have A Bad Credit?

Are you in need of a bad credit home loan?  Then you’ll be glad to know that there are lending companies that do offer mortgage loans even for customers with bad credit.  Nevertheless, some of these lenders may require a bigger down payment to make up for the risk.

But what if you have no money and you can’t afford a down payment?  Is it still possible for you to get a home loan when you have bad credit?  There are actually two steps that you can do to improve your chances of approval- the first step is to improve your credit history and the second one is to get a co-signer.  Let’s discuss each of these options one by one:

Improving Your Credit Rating

Just because you have bad credit does not mean you should not try to do anything to improve it.  You must understand that increasing your credit score even by a few points can make a big difference in getting your loan approved.  Aside from that, the rate of interest you will be given will also depend on your final credit score.  Even a slight increase in your score can win you a much lower interest rate when your credit gets reviewed.

Hence, before submitting your mortgage loan application, you should order a copy of your credit report.  Try to see if there are errors or inaccurate details that can be removed from your file.  If you discover any mistake, send a dispute letter to the bureau that issued your report right away.

You may have to wait up to 30 days until the investigation is completed.  Afterwards, the credit bureau will send you an updated copy of your report and notify the other major bureaus regarding the changes made in your credit file.

[Article: Tips On Cleaning Your Credit Report]

Find a Co-signer

Do you have a family member or a friend with impressive credit history who will be willing to help you out by co-signing your bad credit home loan?  If yes, then having a co-signer can certainly win you the approval you seek from a lender.

Nevertheless, keep in mind that co-signing is a serious responsibility.  If things go wrong or if you fail to keep up with your payments, your co-signer can be held accountable to take over the repayment of your debts.

It could be difficult to convince a person to co-sign for a home loan, considering the risks involved.  However, if you can’t afford to submit a considerable down payment, then you should strive to find a co-signer who will vouch for your credit worthiness.

[Article: Bankruptcy and the Protection of Your Co-Signer]

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

1 Comment
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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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