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A Trusted Guide for Getting a Mortgage with Bad Credit

by Hotline Mortgages Business

To get a mortgage with a poor credit score, you should consider taking FHA loans, considering Community Banks and Credit Unions, saving a large down payment and avoiding multiple loan searches.

Buying a house today may seem hopeless especially for people who have a low credit score. However, there are several options available for bad credit home loans for those who know where to look. The truth is that it is possible to qualify for a mortgage for people who have an average or poor credit score. Here are tips to help you find a mortgage with poor credit scores.

Go For an FHA Loan

A U.S. Federal Housing Administration (FHA) loan is available with no minimum credit score requirements. In addition, it offers several low down payment home buying options. This makes FHA loans the best option for home buyers who have low or no credits when buying a home.  Keep in mind that not all private lenders will go forward with FHA-insured loans and you need to be diligent to find one who supports FHA loans.

Shop Community Banks and Credit Unions

For individuals who are struggling with finances, big lenders may not be the way to go because you may not qualify for the conventional products that they offer. Community banks and credit unions have a reputation for assisting people who have poor or mediocre credit scores. A Private Mortgage Company will not just focus on your credit score but will also look at your assets, cash flow, earning history, and your history of repaying loans.

Save a Large Down Payment for Offsetting Poor Credit

If you do not qualify for a VA or FHA loan, then you should look for a conventional loan. You can improve your prospects by getting the largest down payment that you can. This will enable you to qualify for a less costly mortgage. Before approving a mortgage, many lenders will consider your credit score, debt-to-income ratio, and the loan-to-value ratio. Having a large down payment will make you more attractive to lenders because you will have to borrow less money for making a purchase and have more equity in the home.

Avoid Multiple Searches

Making several mortgage applications or approaching mainstream banks when you have bad credit comes with the risk of being turned away. This is because many lenders do not cater to clients who have a number of hard credit searches on their file. Having several Bad Credit Mortgage applications can jeopardize your odds of getting a mortgage loan in the future.

Get a Whole Market Broker

When you have a poor credit history, you can find a mortgage loan through a broker that has access to the entire market. This way, you will be assured of getting the most favorable deals that you are eligible for within your reach. The best broker is one who has a solid track record of arranging mortgage loans for buyers with bad credit history.

A bad credit score does not have to get in the way of acquiring an affordable mortgage. When you make the decision to become a homeowner, you will be more motivated to clean up your credit report, enhance your payment history, and even comparison-shop for the best mortgages. With the above-mentioned tips, you can find the best bad credit or Self Employed Mortgages.  


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Created on Jun 10th 2019 00:02. Viewed 328 times.

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