If you are interested in getting a mortgage loan with bad credit then you are probably aware of the difficulties that it can present. People who applied for bad credit mortgages
before 2007 would have found it much easier to get their loan approved.
Due to the sub prime mess, many lenders and changed their lending
requirements. No longer can you get a home loan approved with zero money
down. Lenders are looking for different ways to ensure that their
investment is protected.
People who are looking to
get mortgage loans with bad credit should realize that they will have to
go through a lot more work to get the loan approved. It is important
that you start saving up your money for a down payment. Many lenders
want to see the borrower have a minimum of 5-10% down for their loan.
This large down payment will protect the lenders from the borrower if
they were to default on their loan.
Another thing that you should
be aware of if you are going to apply for a mortgage loans with bad
credit is that you should have a good debt to income ratio. The debt to
income ratio is the measuring stick that lenders use to determine
whether or not you will be able to repay the loan. Having a higher ratio
means that you are over leveraged with a large amount of debt. Having a
large amount of debt usually means that lenders are less inclined to
approve loans. Pay down you debts to help improve your debt to income
ratio for your loan.
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