Getting A Mortgage With Poor Credit
With homes for sale in abundance, getting a mortgage with poor credit is not impossible if you know where to look for financing. There are a number of lenders willing to take a change on individuals with not so perfect credit making it possible to own a home even if your credit score does not meet traditional lending requirements.
It is always suggested that you clean up your credit before applying for any type of loan. While this is a good idea, in some cases this can take years, meaning your dreams of becoming a homeowner are either postponed or forgotten.
Lenders realize that not everyone has perfect credit so some offer poor credit mortgage loans for individuals who do not have excellent credit, past bankruptcies, or even a prior foreclosure on their record. While bankrupcty and foreclosures may stay on your credit report for up to 10 years, FHA guidelines allow you to apply for a loan just two years after a foreclosure. This could qualify you for 3.5 down, which is far less than some traditional lenders.
Some secondary lenders will finance individuals just six months following foreclosure or bankruptcy, but keep in mind the downpayments can be as high as 35 and the interest rates are astronomical.
There are a few things that you can do to increase your chances of getting better rates and less money down even with a poor credit history. Have some money set aside for a down payment and closing costs at least 10. Have proof that you have been employed at the same job for a few years. Stay current with as many creditors as possible to show that you are capable of paying on time.
Obtaining a mortgage with poor credit is not impossible. Take some time to research various lenders to determine what is required by you. Everyone goes through rough spots in life, this does not mean that you cannot become a proud homeowners like millions of others, you just have to take a different route.
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