Six Things You May Be Able To Do To Get A Mortgage Loan With Less Than Perfect Credit
While it may be more challenging to be approved for a mortgage loan with lower credit, it's not impossible. With a little creativity and perseverance, you may be able to achieve approval for a mortgage loan that will make home ownership a possibility for you.
Doing the research and putting some effort into the search will make finding financing easier. The following are six things you can try to help you find a mortgage loan even though your credit is not as high as you might like:
Put more money down
The more money you put down to buy a home, the more lenders are going to be inclined to lend to you.
If you have been turned down for a mortgage loan before, you can ask if you might be approved if you were to offer more money down or if you were to buy a less expensive home and borrow less.
Inquire with alternative lenders
If you've been turned down by traditional lenders and financial institutions, you might be able to look into alternative lenders. Alternative lenders might be able to offer you some unique mortgage loan solutions involving collateral or other arrangements.
Opt for an adjustable rate mortgage
An adjustable rate mortgage can often be easier to come by because it allows for higher interest rates.
You may be able to be approved for a mortgage if you opt for an adjustable rate mortgage. However, you'll then have to deal with the fact that interest rates could rise and you may have to pay more in interest than you expected over the life of your loan.
Take advantage of FHA programs
Many programs run by the Federal Housing Administration can make mortgage loans available for those who otherwise might not be approved. You should look into government-backed loans that will help you to find approval despite some credit challenges.
Be patient
There's always the option of taking some time to improve your credit score before you buy a home. If you pay down your debts and start making payments on time, you could quickly increase your credit score over time so that you can be approved for a decent mortgage deal.
Take on more work to increase your income
If you're making more money, lenders are going to be more inclined to offer you a mortgage loan because you'll have more money coming in to make payments.
You could consider taking on a second job or more work responsibilities to have more money to pay down existing debts and have more income to report to potential mortgage lenders. To learn more, contact a mortgage lender like Rio Grande Credit Union.
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