It's not easy to get a mortgage with bad credit, but it's not impossible. If you know what your credit score is and it's not that high, you may well ask yourself if you can still qualify for a mortgage.
There are a lot of different things that a loan advisor will look at when deciding whether or not to accept or reject your loan and your credit score is one of those things. If you know that your credit score is going to be a problem, you should start taking steps to repair it right away. If you want to improve your credit, limit the number of credit cards that you have, the amount of debt that you carry, the number of credit checks that are done on you and the number of late payments that are made. A good credit score is going to get you a better interest rate, but just because your credit is bad, doesn't mean that you won't get a mortgage.
The downturn in economy has made it difficult for people to get a mortgage with bad credit. If there is no way of you improving your credit, you are most likely not to be considered for a mortgage. You could ask someone to cosign, however this is very risky for the cosigner, as their credit score is put on the line for you.
If you have managed to improve your credit over the last six months i.e. paying bills on time and reducing your debt, you could attempt to get a mortgage. Compare banks to check who is offering the best rates and to see who can you offer you the best deal possible. You may not get the best rate, however you can always remortgage in a few years time, if you continue to improve your credit score.
It's likely you will pay a higher interest if you have a poor credit rating and they may insist you get insurance if you don't have enough funds for down payment. This could increase the cost drastically, so make sure you account for all this and know exactly how much you will be paying each month to the bank. You don't want to be in the position of defaulting on the mortgage, which will virtually be impossible to get another mortgage in future.
Due to the current financial climate, it is very unlikely you will be considered for a mortgage if you have defaulted or filed for bankruptcy in past. All you can do is shop around, but you may find that interest costs are set so high, in order for a bank to trust you that it simply may not be worth it.
If you want to be smart and save a lot of money in higher mortgage rates, keep your credit score good.
There are a lot of different things that a loan advisor will look at when deciding whether or not to accept or reject your loan and your credit score is one of those things. If you know that your credit score is going to be a problem, you should start taking steps to repair it right away. If you want to improve your credit, limit the number of credit cards that you have, the amount of debt that you carry, the number of credit checks that are done on you and the number of late payments that are made. A good credit score is going to get you a better interest rate, but just because your credit is bad, doesn't mean that you won't get a mortgage.
The downturn in economy has made it difficult for people to get a mortgage with bad credit. If there is no way of you improving your credit, you are most likely not to be considered for a mortgage. You could ask someone to cosign, however this is very risky for the cosigner, as their credit score is put on the line for you.
If you have managed to improve your credit over the last six months i.e. paying bills on time and reducing your debt, you could attempt to get a mortgage. Compare banks to check who is offering the best rates and to see who can you offer you the best deal possible. You may not get the best rate, however you can always remortgage in a few years time, if you continue to improve your credit score.
It's likely you will pay a higher interest if you have a poor credit rating and they may insist you get insurance if you don't have enough funds for down payment. This could increase the cost drastically, so make sure you account for all this and know exactly how much you will be paying each month to the bank. You don't want to be in the position of defaulting on the mortgage, which will virtually be impossible to get another mortgage in future.
Due to the current financial climate, it is very unlikely you will be considered for a mortgage if you have defaulted or filed for bankruptcy in past. All you can do is shop around, but you may find that interest costs are set so high, in order for a bank to trust you that it simply may not be worth it.
If you want to be smart and save a lot of money in higher mortgage rates, keep your credit score good.
About the Author:
Mark Dawson writes for the the Loan Arrangers where you can compare loans and apply online for debt consolidation loans , and bad credit loans.
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