1. There is a lot of great opportunity in the housing
market of today. However, for potential home
buyers with bad credit, finding a home loan may
put a stop to capitalizing on this great buyer's
market. However, it is possible to obtain a
home loan with bad credit as long as you are
aware of the particular obstacles that will be
present. You need to be prepared to take a hit
in terms of interest rates and closing costs and
be ready to answer any questions that a lender
might have.
westernsky
2. If you are willing to shop around, though, getting a home loan with
bad credit is possible The internet is the best place to start this
search, and this article will help you learn how Meeting the Minimum
Requirements The qualifications you need to get a home loan are
very similar to those needed for any type of loan However, bear in
mind that the wiggle room, especially in terms of income, for home
loans is far tighter That is because a home loan will likely be a
6-digit figure with an obligation for repayment over the course of 30
years
3. Therefore, before you even begin the search for a loan, make sure
that you meet these minimum requirements: 1 You must be 18
years old or more 2 You must be a citizen of the United States
4. 3 You must have a steady source of income which you can prove is
sufficient enough to cover the mortgage payment each month in
addition to all of your other bills and obligations 4 You must be able
to make a sizeable down payment (generally 20-25% of the
purchase price) and cover the closing costs of your loan
5. Searching for a Loan Once you have made sure that you meet the
above minimum requirements, beginning your search for a home
loan with bad credit is simple enough You can use the power of the
Internet to look for lenders who are likely to service borrowers whose
credit is less-than-ideal by searching for "home loans with bad credit"
though your favorite general search engine You will find that literally
dozens of lenders pop up, which is why your chances of getting a
loan is greatly increased Take time to review the website of 8-10 of
these lenders and then choose 3-6 that look the most promising
6. Do some background research on these lenders through the Better
Business Bureau or similar websites designed to provide users with
a breakdown of the general business practices of online entities
Once you find a list of at least three lenders to work with, submit your
preliminary paperwork Generally, there will be a basic form to fill out
right on the lender's website Once your information is received, you
will get a call from the lender who will further discuss your home loan
options with you
7. Some Realities Remember that, though getting a home loan with
bad credit is possible, the offers that you receive because of your
bad credit will not be the best that westernsky the lender can do
Instead, be prepared to pay an interest rate that is several points
higher than those you see advertised Also, remember that in buying
a home with bad credit cash is king The more money you can offer
up front in good faith, the more likely a lender is to work with you to
process your loan
8. Once you purchase you home and begin to repay the mortgage,
your credit score will slowly improve When that happens, you can
look forward to refinancing your initial home loan for a better interest
rate In this way, getting a home loan with bad credit is actually the
door to a better financial future
