affected some of us harder than others, but for everybody the challenge of obtaining a simple loan from a finance institution has become even harder. But how about seeking funds to buy a home? The question is, is it possible to secure a home loam with bad credit? The answer is, home loans with bad credit are not so difficult.
In the world of economic crisis that we live in presently, obtaining approval from mortgage companies when you have a bad credit is quite difficult. However, you do have some choices, and when you approach the correct mortgage company, you can secure and affordable deal. Remember, lenders do lend if they earn a profit from it, so home loans with bad credit is not so difficult too. The following are 5 ways in which it is possible to secure a home loan with bad credit.
1. Apply to a mortgage company that does not consider credit scoring
Most of the lenders check the credit score to review an individual’s home loan application. according to the information you provide in your application it is given a score and when the computer scores you as a risk, your application will be declined, even before a lender has the chance to review your application and hear from you the cause for such low credit score.
So, when you apply to a mortgage company or lenders who do not consider credit scoring, then they will personally evaluate your application and makes a decision on your applications. So, you have a better chance of securing a loan for your home.
2. Do not get Mortgage Insurance
There are 2 approvals you need to receive when you applying for a home loan for more than 75 % of the property value. The approvals are from the mortgage insures and the lender. By having the 25% deposit of the funds covered, other costs like stamp duty, legal fees, you can avoid the mortgage insurer from assessing your application and so your chances of application being approved increases.
3. Apply to credit unions
Credit unions are similar to banks but are owned by their members, who have common things like working in the same industry or living in the same locality etc. These non-profit organizations pass the earnings to the members of the credit union for low fees.
4. Show that your finances have improved
If you have had issues with your finances in the past, you have to provide evidence to your lender that your financial situation has improved by showing him the rent and utility bills you have paid. This will reassure the lender that you are back on track.
5. Apply to specialist lenders
Based on the history of your credit card , the main lenders of financial institutions will not assist you. However, you can approach some special lenders in the market who do lend loans even to those with bad credit. The interest on the loan will be higher than normal, But you can sustain long enough with them till your credit situation improves and then you can go for finance with low interest rate.