Are you searching for how to get a mortgage with bad credit? Well … finding a mortgage when you have a bad credit score is not impossible. However, it usually requires the borrower to make a few concessions, such as paying a higher interest rate.
Here are several other tips to help you seal the deal:
Get a stable job
It’s very important that you can demonstrate to lenders that you have a stable income.
Eliminate your debt
By doing this before you apply for a home loan, you’ll minimize your debt to income ratio and make it much harder for your lender to say no.
Save a lot of money
Lenders love borrowers who are willing to put down a large down payment because it means they are less likely to default.
Consider a “rent to own” option
Find a seller who would be willing to accept a contract that sets aside a portion of the monthly rent for the down payment at a later date when your credit is better.
Explain the negatives on your credit report
Believe it or not, lenders may be willing to overlook a poor credit score if they know you had a good reason for paying your bills late — or not at all.
Visit your local housing agency
There are government loans and special assistance programs for people with bad credit.
Find a cosigner
Try to find a family member with good credit who will cosign your loan. Don’t be surprised if they turn you down, however, because they’d be on the hook if you ever default.
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Readers: This is article 19 of 25 from my no-nonsense “Mortgage Basics” quick-reference series.
Photo Credit: GotCredit
I’d suggest a person in this situation live in a shared housing situation with roommates unless there is some reason they cannot like having children. Then once your finances are under control you can apply for a mortgage