Having a home is one of the most, if not the most important necessity that every family should have. We all need shelter. To apply and get approved for a home loan most borrowers need to have three things first – a good credit score, a significant down payment, and a stable source of income. This seems pretty farfetched for someone with bad credit. But even if your credit is less than perfect, you don’t really need to rule out having your own home in the future. A bad credit home loan can give you the break that you need.
It’s certainly a long road, but it’s a road of possibilities. When applying for a home loan having bad credit, you just need to emphasize on factors that can compensate your credit rating. There are some lenders that allow personal appeals and borrowers can explain for example, why a certain bill wasn’t paid on time. Remember, you just need to focus on positive things and try to draw the attention away from your credit rating when explaining.
If you have assets, be sure that you highlight their value. You may not have a huge sum of cash in your savings account, you may not be able to put down a significant down payment, but having a property that’s of value communicates to the lender that you have something to help them get repayment just in case of default. For them this means that lending you involves little risk.
Working in a job that you had for quite a while is also something that you should stress out to your lender. This is something that you can highlight to help you offset your bad credit rating. If you have had any regular increases or promotion, be sure that the lender knows about it.
Bear in mind that you want the lender to know that you are a changed man from your past struggles with credit. If you have a retirement account or a savings account that you have been maintaining for the past months, show it to the lender. Make them feel that you are a person with discipline and that you are consistent and stable.
A flight risk is something that lenders definitely want to avoid. During interview, make that lender feel that you’ve committed to stay put – being in love with your home, the community that you’ve come to know, and the neighbors that have become your friend. Having strong ties in the area tells lenders that you’re staying for some time.
This actually is for your own good, put down a higher down payment as much as possible. At least you lessen that amount of money that you need to borrow and pay with interest in the future. Also, lenders approve loans that have bigger down payment faster than those with less.
Lastly, bring documentation. All of the things that you talk about that you have, without solid documents, are still useless. Be sure that you have proof for your income, asset, job certificate, etc. Solid documentation is something that lenders want to have to ensure their interest is secured in every transaction.
Make sure to get all the information about your bad credit loan. Companies like BHM Financial will work with in your loan and that can never be overlooked. Just simply ask.