Help Getting a Mortgage with Bad Credit
Having bad credit is not uncommon and does not make it impossible to get a mortgage loan. Basically the lower your credit score the more difficult it will be for you to get a mortgage approved by a lender.
Borrowers with a lower credit score are more likely to miss payments and default on their home loans. Because of this, mortgage lenders will charge a higher interest rate and limit the maximum amount that can be borrowed. The lender may also cover their risk with higher fees for late payments etc.
If you’re in no rush to get a mortgage, then you should try to improve your credit score. The higher your score, the better the mortgage options available to you will be. This means cheaper the interest rates; and consequently cheaper mortgage repayments. Improving your own credit score involves reviewing your credit report and possibly taking actions to improve your credit rating. Actions such as reducing credit card balance ratios, repairing credit report errors and disputes, getting a joint account with someone who has a better rating, getting a secured credit card. Alternatively you could recruit the services of a credit counselor to do the job for you.
Having someone available to you to co-sign the loan can also reduce the interest rates you will pay. The co-signer should be aware that this will affect their own borrowing potential as the loan will be factored in when applying for any future credit. Also they will be liable for your loan should you fall behind on your loan repayments.
If your credit score is so bad that you have no options available to you because no lenders will agree to finance you, then using a member of your family or a spouse with a better credit score than you, by getting them to take out the mortgage for you might be and option.
