Bad Credit Does Not Equal No Mortgage
Having bad credit will not necessarily prevent you from obtaining a home mortgage. Finding a lender and finding reasonable rates can be a challenge. However, the task is not impossible or hopeless. Anytime you realize that you may be interested in purchasing a home in the near future, you should begin working to improve your credit. However, you may not have time to bring your bad credit to excellent credit before applying for a mortgage.
There are lenders who will work with people who have credit problems. As the saying goes, “bad things happen to good people.” Some lenders realize that good people who are responsible can still have poor credit. Life sometimes throws us curveballs that we cannot avoid. This does not mean that someone should see their dream of owning a home go down the drain. Lenders specializing in sub prime or bad credit mortgages typically have guidelines that are a little less strict than those of mainstream lenders.
For example, having a foreclosure or bankruptcy on your credit report does not mean you will automatically be denied a loan. Many bad credit mortgages have guidelines in which they will consider lending to you after a specified amount of time has passed since your bankruptcy was discharged. Some lenders to not even have a set time limit. If you have a bankruptcy on your report but have since established a reasonable credit score and have been paying your bills on time, you may not have to wait before being able to apply for a mortgage.
Many bad credit mortgage lenders will pay close attention to your credit score. If you score is at least 600 or above, there is a good chance they will work to help you obtain a mortgage regardless of the problems listed on your credit report. The average credit score is typically listed at about 677. Therefore, it is not at all possible to think that you could have a credit score of 600 or better.
Before applying for a loan you may want to order a copy of your credit report and credit score. View your credit report to make sure that no inaccurate information is found on your credit score. Errors to happen and you have the right to dispute anything you believe is incorrect. If you do identify a problem, you may see an increase in your credit score.
Explore your options with several different bad credit mortgage brokers. These brokers work with a variety of lenders. If one broker cannot find a lender who will work with you, meet with another. They each have their own pool of mortgage lenders. If one broker cannot help you, another may. Do not give up if you wish to obtain a mortgage.