June 3rd, 2019 1:00 PM by Eric Willner
Radio Show Notes 5/30/19 Thursday - How To Get A Mortgage Even With Bad Credit
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The Real Estate Show explores How To Get A Mortgage Even With Bad Credit on our Friday ATM edition of the show. As the market improves, and more liquidity enters the marketplace, more people’s attention is turning to financing. We know that when you apply for a mortgage loan, the first thing lenders will look at is your credit score for their approval decision. If your credit score isn’t where it needs to be, this can make it very difficult to get a loan. Fortunately, there are a few things you can do to improve your chances of getting a mortgage with bad credit.
1. Review your credit report.
Before applying for a loan, you should figure out exactly where you currently stand in the credit world. Contact one or all three of the major credit bureaus and ask for a copy of your credit report. You are entitled to a free copy of each one at www.annualcreditreport.com. It will show in detail what your report shows, except it will not include your score.
For a small fee you can request your current score. The detail will reflect the factors contributing to your score, like your credit limit, your current outstanding debts and whether you missed any payments on other loans. Check your credit report for any mistakes. Look for items like a repaid debt (paid off) that is still on your report or reports of missed payments you actually made on time.
Important, if there is a mistake, contact the rating bureau and ask them to remove the error. This is getting you on your way on How To Get A Mortgage Even With Bad Credit. This would also immediately bump up your score and improve your chances of getting a mortgage. For more tips to improve your score go to www.timetofixmycredit.com.
2. Pay down your credit cards.
Another way of How To Get A Mortgage Even With Bad Credit is to pay down your credit cards. A significant part of your credit score is based on the amount of outstanding credit card debt you carry. If you are near your credit limits, it will drag down your score. This is called useage. By paying down these balances, your score should improve in a month or two, which will make it easier to get a mortgage. Obviously, by paying down these balances, it will make it easier to get a mortgage.”
3. Apply for an FHA loan
The government has programs that can also help you get a mortgage through an FHA Loan, which is another way of How To Get A Mortgage Even With Bad Credit. With this program, the government guarantees part of your loan. As a result, you can qualify for a mortgage with a score significantly lower than what is needed for a regular loan. With this program, you can also make a smaller down payment, as low as 3.5 percent of the cost of your house.
4. Save up for a down payment. Bigger is better.
Bigger down payments also helps How To Get A Mortgage Even With Bad Credit .It’s easier to qualify for a loan if you can make a sizable down payment upfront. Lenders are more likely to give money for a couple reasons. First, since you’re borrowing less money, they’re taking on less of a risk with your loan. In addition, saving up for a down payment takes financial discipline.
This shows you are more responsible with money than your credit score may indicate and is something lenders consider.
5. Perhaps get help from a cosigner.
When your score isn’t strong enough to qualify for a mortgage, a close friend, a relative or family member can help provide the scores they are looking for.
When someone else cosigns your loan, he or she is ALSO guaranteeing your payments. As a result, lenders will consider their credit score as well for your application. They feel more secure with a stronger cosigner.
6. Keep working on your credit score.
If all this fails and you can’t get a mortgage loan now, get to work on your credit score so you can qualify later ( don’t forget all the resources at www.timetofixmycredit.com).
Make sure to make all your payments on time to avoid any more hits on your score. That’s How To Get A Mortgage Even With Bad Credit.
Try to pay down your debts as much as possible, as this will also help. In a year, and every year thereafter, check to see how your score has improved. Hopefully it will be high enough for a mortgage loan. Check with us and we may have some extra tips for you.
Getting a mortgage with bad credit isn’t easy, but following these steps will improve your chances.
Also, once you get a loan, be sure to make all your mortgage payments on time to boost your credit score so you won’t have to go through all this work again.
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