Finding a Bad Credit Mortgage Lender
Bad credit happens to good people all the time, but the most important thing you can do is find the lender that will help you get the bad credit mortgage thatís right for you.
It all starts with getting a realistic idea of what your financial situation is; work on your credit score, fix problems on your report and get on the road to being debt free. Showing a lender that youíre trying will go a long way towards helping you get a good bad credit mortgage. From there youíll want to save up a large down payment and comparison shop with different lenders.
Understand Your Credit
The first step to getting a bad credit mortgage is to understand your credit situation. How bad is your credit, do you even need this kind of mortgage? A credit score of 600 or more is considered good, but if youíre just under the link youíll want to do some work to see if you can bring it up. These kinds of mortgages should be a last resort, not the first line of defense.
Pay Off As Much Debt as You Can
Paying off as much debt as you can is the first step towards getting a better deal on your next mortgage. While your first instinct may be to start saving up for a down payment, the amount of extra interest youíll be charged over the life of your loan means youíll want to pay off your debts while you can. Start with the small debts and work your way towards paying off the big ones. If you have a tax refund coming up, apply most if not all of the balance towards giving yourself a clean slate.
Stay Current and Keep Paying Your Bills
After youíve started paying down your debts, youíll want to stay current with your current bills, stay on top of them and keep paying them. You donít want to get behind on one thing to pay another. The longer you have an account open and current the better off youíre going to be.
Save for a 20%+ Down Payment
Your next step needs to be saving for your down payment. Itís better to wait a little longer to buy your dream home than be thrown out of it in the next 10 years. If you want to be able to get the lowest interest rate and the best mortgage, youíll want to have plenty of cash upfront to show private mortgage lenders and conventional mortgage lenders. Any mortgage broker will tell you that youíll need the money available, so start saving now.
Comparison Shop Lenders
Donít be afraid to comparison shop when it comes to choosing the right mortgage lender for you. Doing research online will help you figure out what your rate could be if you shopped around. Donít be afraid to look around beyond your usual lender. With rates so low lenders are willing to compete for your business, even if youíre looking for bad credit mortgages.
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