One of the worst side effects of having bad credit is that it is difficult to find a mortgage
to purchase the home that you need or desperately want. Being a
homeowner is very rewarding, and paying a monthly mortgage payment in
lieu of paying a rent or lease payment is one of the best ways to secure
your future and become financially sound. Owning a home and getting a
home mortgage is not out of reach, however, for those borrowers with bad
credit.
A bad credit mortgage
can allow homeowners with less than perfect credit the opportunity to
realize the American dream, stop renting, and start owning!
Getting Your Bad Credit Mortgage
When you have a bad credit score, any type of loan or line of credit
that you apply for is difficult to obtain. That is why special lenders
offer this type of mortgage financing for individuals who show great
potential to become worthy borrowers but are lagging behind in some
aspects, like credit performance in the past. These lenders work hard to
put you in a home that you can actually afford. You can help them in
their quest by making your application for a bad credit home mortgage
look more appealing. There are certain steps outlined below that you can
follow to help secure the mortgage funding you need with bad credit.
First of all, you should check the status of your credit by pulling
your own credit report from the three major credit reporting bureaus,
Experian, Equifax, and Trans Union. It is important to check your report
with all three because different lenders use different credit reporting
services when they investigate your credit. Check to make sure that
everything that is noted about your personal situation in regards to
your accounts and delinquencies is in order.
Any item on your credit report that is reported inaccurately should
be addressed swiftly with the bureau in question. The bureau must prove
that the item belongs to you or remove it in a timely manner under law.
Down Payment On Your New Home
Also, you should begin working diligently to save a down payment on
the home that you will buy. While saving money is never enjoyable, try
to remember the satisfaction that you will have when you turn the key to
your own home, one that you own and are simply not paying rent on.
Saving as much money toward a down payment as you can is important
because the lender will want to see that you are a responsible borrower
who can handle money; in addition, you down payment will make the amount
that you need to borrow less, which makes your interest rate less as
well. This will make the entire price of your home, including interest,
more affordable. While many lenders want a 10% down payment on your
home, there are other lenders who will require less.
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