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Home Loan in 3 Easy Steps
Home Loans with Low Credit Score
Regardless if you are applying for a second mortgage or home equity loan, it might be hard to get a mortgage loan if you have poor credit history. From the lender’s perspective, having credit problems gives more stress on the other requirements to decide whether or not you will get approval.
You can find here some tips on how to get approved for home loans:
1.Think about how to handle a down payment
Even a 2-3% down payment would influence your ability to receive mortgage loan approval or help you obtain a lower interest rate that comes with your loan. There are multiple possible ways to secure a down payment. At times it might be worth making savings for a few additional months or even a year to show a down payment.
2. Home loans providers will be checking closely your income as well as your job history
Bad credit means that lenders are going to ensure that your income is sufficient to satisfy all of your minimum payments. Time period of you being employed works for your advantage. If you have been working for almost a year, think about waiting a bit longer before you decide to submit application for your mortgage.
3. Loan providers will require looking at your most recent debt payments and check if they were made on time
With you having experienced debt problems in the past, service providers will be looking with attention at your payment history of last year or more. They would be very interested in the way you handle your car, utility and various credit card payments. They may be ready to ignore past credit problems if currently you are repaying all your debts in a consistent way.
4. Try using various strategies to improve your credit score
There are many instructions to be found online on how raise your credit score. Check them before you apply for your loan.