- October 26, 2022
- Written by Admin
How to improve chances of getting a mortgage with bad credit?
Has your loan application ever been rejected due to your poor credit rating? If the answer is yes, read this article to find out how you can improve your chances of getting your application approved. Your credit history is one of the most important aspects that lenders examine when reviewing your mortgage application. Your low credit score will reduce the chances of obtaining ideal mortgage terms. At times, it would pose a question of your ability to repay the mortgage amount. If you are planning to purchase or refinance your dream home, your poor credit rating may hinder your chances of getting approval. Here are a few suggestions for improving your chances:
Clear Your Credit Record
Performing a detailed analysis of your credit record and having incorrect information removed might prove to be a tedious task. Doing so will not only improve your credit score but also help you acquire better mortgage terms. You might also consider paying off high-interest debts. In order to make this a smooth process, it is advisable to seek guidance from an expert.
Gather Proof of Delayed Payments
Every shortfall has a reason, and most of the time, a genuine one. Say, for instance, you were unable to work due to certain severe injuries and as a result, you had to skip a few payments. You will want to prove this to your lender by gathering documents that can justify the delayed/missed payments. But remember to be honest and truthful.
Lower the Credit Score, Larger Down Payment Required
With a low credit score, getting approval for your mortgage is a difficult task. One factor that may help your approval process is having a large down payment. With a low credit score, the chances of getting approval with a 15% down payment (or more) are a lot greater.
Try to Seek a Co-Signer
Getting a co-signer with good credit and a good income can improve your chances of getting approval. Keep in mind that the co-signer will also be responsible for the payments of the mortgage if you are unable to pay them on time.
Seeking Advice from A Mortgage Broker
It is always advisable to seek professional advice when in a predicament. A broker who is an expert in bad credit mortgages can be of great help.
Apply to “B” Lenders
There are lenders who provide mortgages for clients with low credit scores.
Consider all of the above factors when applying for a mortgage. Having a low credit score does not mean that you will be declined, talk to a mortgage broker today.