How To Get A Mortgage With Poor Credit
Discovering how to get a mortgage with poor credit can revitalize the dream of home ownership. As people have been put in difficult financial situations in the past few years, it should be comforting for them to know that they still have mortgage options even if their credit is not perfect.
- In orfer to get a mortgage with poor credit, first you need to understand what your credit score says about you. The magical three digit number that is assigned to you will tell a potential mortgage lender a lot of details about you and how you handle money. A score below average does not mean that you will not get a home loan. It most likely means that you will pay a higher interest rate and be required to have a larger down payment.
- Determine if your finances are in order. Before contacting a mortgage lender, you need to make sure that your financial problems are in the past. It is important to stay current on all of your monthly bills even if you were behind at some point in the past. Also, try to save enough money to cover a 20% down payment.
- Contact a mortgage broker to help get a mortgage with poor credit. A broker has access to many lenders which allows him to find you a mortgage even though you have poor credit. Avoid lenders that advertise on television and only work with a local reputable mortgage broker.
- Do not hide your past financial situation. Tell the mortgage broker about your difficult financial history and how you have improved the situation. The approval of a mortgage will rely on more than just your credit score. Your employment history and the amount you have for a down payment will also be evaluated.
- Ask about an FHA mortgage. The Federal Housing Administration has loan options for people who want to get a mortgage with poor credit. The FHA offers mortgages with lower down payments and fewer credit stipulations. Check with your lender to see if an FHA loan is an option for you.