Poor Credit Home Loans - 6 Steps to Easily Getting Approved for Poor Credit Home Loans
Getting mortgage approval has been made more difficult in the wake of the financial crisis. It's even more difficult to get a mortgage loan if you have poor credit because lenders want to be guaranteed that you'll pay back the loan.
It's really not that difficult to improve your credit score and get approved for a poor credit mortgage. I've outlined 6 steps that are easy to follow and will change the way mortgage lenders look at you.
Step 1. Frequently check your credit report
Lenders look at 3 main areas when deciding to lend you money
- Steady Income
- A Down Payment
- Solid credit history
By regularly checking your credit report, you'll know if there are any mistakes that are hurting your credit score. You may think that this step is trivial, however, it's estimated that up to 40% of all credit reports contain some type of errors, some of which may negatively affect your credit score.
When checking your credit report, you'll need to pull all 3 reports because you don't know which ones the bank will reference, so it's better to err on the side of caution.
Step 2. Dispute inaccurate Information
As mentioned before, any misinformation on your credit report can hurt your credit score and increase your chances of your poor credit mortgage application being denied. You can rid your credit report of inaccurate information by disputing it with the credit bureau.
If you have proof of the mistake, provide it with a copy of the credit report when you make your application to the bureau. Make sure that you send your request via certified mail with a receive request receipt attached so that you have proof the bureau received your dispute.
Step 3: Pay Off Delinquent Accounts
Accounts that are late, charged off, in collections will hurt your chances of being approved for a mortgage; you'll need to prove to the lenders that you're responsible and taking action to rectify the situation.
You lenders are more than willing to work with you to pay down these accounts, and that's really what the banks and lenders want to see.
Step 4. Timely Payments
You'll need to establish a pattern of timely debt payments before getting approved for a mortgage with a decent interest rate. If you have just paid off some delinquent payments, wait about 6 months before applying for a mortgage, because the older the delinquency, the better your credit looks.
Step 5. Reduce your debt to income ratio
During the mortgage application process, your underwriter will ask you about your ability to make your payments on time based on the current level of debt you have.
Try your best to bring your monthly debt payments to around 15% of your income. If you need to, try consolidating all your debts together with a debt consolidation loan. This should lower your interest rate and make your debt payments more manageable.
Step 6. Your FICO Score
Aside from getting your credit report, you'll also need to check your FICO, or credit score to see what your number is. Your credit score is a 3 digit number from 300-850 and can be ordered from www.myFICO.com.
Your FICO will need to be at least 720 to get a competitive interest rate on your loan. If your score is below 720, read through the report analysis that came with your score to see what's bringing it down.
Be advised that Experain no longer allows the purchase of a FICO score, they now use what's called the Vantage score so if you want to get an idea of what your Experain credit score is, purchase the Vantage score through them and then multiply your result by about 0.86 and you'll be in the ball park.
I want to be real with you. It is very unlikely that you will significantly improve your credit rating in thirty days as some people promise. However, everyone's situation is different. In some cases you might only need minor tweaking and others will need more work.
Either way if you follow the 6 steps outlined above, your credit score will increase and you'll look more favorable to your lenders.
Watch over my shoulder as I teach you how to repair your credit
Questions and Answers
Article Tags:
poor credit home loans
The article deals with the issue of what’s called a “poor credit home loan.” These loans, which are sometimes called “subprime loans,” might be a bit scarcer in today’s tightened credit markets, but they’re still out there, waiting for the right buyers, even if their credit isn’t all that good. The article also makes a key recommendation about the need to clean up any delinquencies on the report.
If you're in the market for a poor credit home loan there 3 things you need to be aware of before you proceed. Predatory lending has caused people's homes to go "underwater" meaning that the amount of their loans more than the value of their homes. You can avoid predatory lenders by doing your homework. In the end it will pay off because you'll get the best service for your situation.
Poor credit home loans are in high demand especially given the current economic circumstances. In fact there's almost too much information available about them.
Poor credit holder can also apply for home loans since .All record suppose to be getting accepted.
The fact that you're looking for legitimate sources for poor credit home loans shows you are a wise, smart and careful person. Find out more...
Registering a company is no longer a time-consuming and tedious business. With the new online company formation services available you will be able to register your new company in just a few clicks of a button.
Establishing large credit card debts in college develops poor money management skills. Also, high interest rates keep students in debt well after school.
If you're planning a holiday with your family, don't forget to include your credit score with you. Monitoring your credit score while you're away can be a big help. If the thought of thieves running up a huge debt on your credit card scares you, then online monitoring is what you need. Read article to know more.
Lots of people want to know how to clean up their credit report. While there are plenty of agencies out there who will do the work for you for a price, it's also possible to clean up your credit report yourself if you're willing to put in the time and effort.
Your credit score is an important thing when it comes to how lenders, dealers, companies or banks see you. It is what they look at to determine if you are worthy enough to get a loan or even to get that job position you've been longing for.
There are 5 things that you need to do if you want to successfuly recover from an affair as a couple. I've outlined each one of them in the following article and how they'll help your marriage after an affair.
Does my wife sitll love me after the affair? Sometimes I don't really think so because of the way she looks at me and talks to me. How will I know if she still loves me?
Cute quotes might seem a little corny, but they really are cute and can keep the fire going in a relationship. Cute quotes help to boost the love and affection in a relationship and they can keep the romance and the relationship strong. Telling your boyfriends lovely quotes shows him affection and he will feel love and passion toward you in return.
Are you struggling to have sex again after your husband's affair? Avoid the common mistakes that many women make and learn how to make your trip back to the bedroom satisfying for both of you.
Your FICO score is the most important 3 digit financial number because it instantly tells lenders the likelihood of you paying back a loan. Scores come in a few different formats; you can order them individually or you can get a three in one credit score.
Discuss this Article
