How to Get a Mortgage with Poor Credit: 4 Steps
Buying
If you’ve ever wondered how to get a mortgage with poor credit, you’re not alone. Thousands of would-be homebuyers have bad credit, and some mistakenly believe that this fact will prevent them from getting a mortgage. Luckily, this isn’t the case. In fact, it’s still possible to get a loan for your home, you just need to learn how to get a mortgage with poor credit.
How to Get a Mortgage with Poor Credit
1. Brace yourself to pay more upfront
Unfortunately, having bad credit does mean you’ll need to be ready to pay more money. Since good credit scores generally indicate reliable lenders, people with poor credit scores will need to shell out more cash to make up for their low scores. With this in mind, be prepared to shop around and secure the lowest possible mortgage rates for you. What’s more, you’ll want to be sure that you do your homework about any would-be lenders you intend to work with. Many operations are predatory and set their sights on low-credit score buyers. Stay away from these at all costs.
2. Prepare to refinance your mortgage quickly
Once you’ve gotten a mortgage, you’ll want to refinance it as soon as you can. Generally, a buyer is able to refinance within two years. In addition to boosting a credit score, this also helps to ensure a better deal in the long run. Keep this in mind as you shop for mortgages, and try not to be too discouraged about the prospect of a bad deal. You can always adjust down the road.
3. Find a lender who understands your options
Borrowers with poor credit may not want to opt for a traditional 30-year mortgage. For best results, find a lender who understands things like adjustable-rate mortgages and various lending options that may apply to poor-credit buyers.
4. Secure a co-signer
If you have poor credit, a co-signer will be a lifesaver. In addition to lowering your rates, a co-signer can also help simplify the process for you. According to FHA rules, the co-signer should be a family member who can take over financial responsibility if you cannot pay back the loan.
You Can Still get a Mortgage with Poor Credit
If you have poor credit, don’t despair. It’s still possible to get a housing loan, you’ll just need to know how to get a mortgage with poor credit. These four steps are a great place to start, and will get you on the road to realizing your housing dreams.
