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February 26, 2013For most of the people who have very poor credit history or no history, getting a home loan may seem like a dream. Since the money involved with the mortgage is big getting an approval for the mortgage with the bankruptcy or bad credit will be very difficult. So this article is for all who are asking can i get a mortgage or how to get mortgage with bad credit.
To be frank you can get a mortgage loan even if you have low credit score. You may have come across the term subprime loans. Many mortgage lenders are ready to offer even bankrate mortgage through this subprime loans. But before that from your part you need to do something for getting an approval from the bad credit mortgage lenders in the market
Permanent Employment
Since your credit score is low the lender will expect something that guarantees you can able to repay the mortgage. In this case you will be approved for the long term mortgage program due to the affordability. So you need to provide a proof on the stable job and stable income source. Many lenders would require that that the applicant should have worked with the present employer for at least 3 continuous years. When you submit the proof the lender can get an opinion that you can repay the payment in the long run.
So if you have just left the job and joined with the new employer or you are still searching for a job then getting a mortgage loan will become very hard. In these cases you should wait until at least the required years to get approved for the loan.
Down Payment
Due to the low credit score when you apply for a mortgage you will be required to pay the down payment of at least 20 to 30% of the capital amount.
So if you have planned to get a home which is worth $200,000 then you should have at least $40,000 in hand. Since this $40,000 is somewhat a big amount the lender will feel like you are really keen in repaying the mortgage. You can calculate the bankrate mortgage on down payment using the mortgage calculators.
Credit Report
Before applying for a mortgage it is good to review your credit report by yourself. Many mortgage lenders are out there they will just reject your application by not reviewing intensely. Whatever the credit scores may be it can create a great impact on your mortgage interest rates. When you don’t aware what is your real credit score you chances are there for the lender to pose a high interest on you. So it is suggestible to order a recent credit report and become aware where you are actually standing now.
Try to purchase your credit reports from all 3 credit bureaus and read every statement on your report. If you find any errors contact the credit bureau immediately and get the wrong item removed from your report. Remember even a small mistake have the potential to hurt your final credit score very badly.
Debt to credit Ratio
Everything that is contributing in your credit score report like car loan, secured and unsecured credit cards, personal loan, previous foreclosures and other financial liabilities will be considered when you apply for a mortgage loan. Normally all mortgage lenders requires the ratio to be around 40:60 which means your earning should be at least 20% higher than your all payable debts.
Make sure you have everything in place before approaching any mortgage lender for the loan. If still you have a question how to get a mortgage with the bad credit then you can talk to the mortgage professional they will help you to get a mortgage without any hassle.
