If you are trying to get a poor credit home loan, then you will want to read this. Specifically, we will discuss how the mortgage market implosion has changed your options, what your best alternative for a bad credit mortgage is today and easy steps you can take to improve your chances of qualifying.
A few years ago, you could get a bad credit mortgage with very little trouble. If your credit score was in the 500’s or you could not verify your income, you just paid a higher interest rate. No money down? No problem! You just got 100% financing. Unfortunately, due to the tightening market conditions, these types of loans are no longer available.
Those with less than perfect credit are left with few options today for bad credit mortgages.The best option out there for those with poor credit is an FHA loan. FHA loans, which are backed by the Federal Housing Administration, offer competitive rates to those who qualify. While their underwriting guidelines have tightened significantly in the last few years, they still offer loans to people with scores down to 620.
If your credit score is below 620, you will need either a significant down payment or you will need time to improve your credit score. There are several easy steps you can take to improve your credit.
Paying your credit cards down to below 20% of your credit limit is one of the best ways to raise your credit score. You should also take the time to dispute any errors in your credit report. Key things to look for include: late payments reported in error, old negative accounts that should no longer be on your credit report and incorrect credit limits of your credit cards. By paying off credit card debt and removing incorrect information, you should be able to improve your credit score quickly and easily.
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