First Time Buyer
There is some good news for the first time buyer, because there are mortgage loans for people with bad credit. But you are going to have to prove you can pay the money back, and that you are not going to be taking on more than you can chew so to speak.
• First, determine exactly what your credit score is. if you're above 580, you can probably qualify for a home loan. You will have to pay extra interest but at least you will be a home owner.
• You then make an application with several financially regulated companies. It is generally better if you already know which property you have in mind to purchase, so that the lender can see what they are lending on. In most cases it's pretty difficult for a lender or broker to write up a loan if they don't know the value of the home, etc.
• Make sure you have all your financial details to hand and your employer address and contact etc. This is so that the lender can do checks. When I bought my home the lender asked for a lot of information including three months worth of bank statements. pay stubs, and tax returns. I also own my own business so they wanted tax returns for my business and an affidavit from my CPA stating that he had filed the returns.
If your credit is in the right range and you don't have too many derogatory items you should have a good shot at approval. Choose wisely as you want the lowest fees, possible consolidation of debts and as low interest rate as possible.
Modifying or Refinance
If you have a mortgage which you know you can get a better interest rate even with a low credit score. Or you just want to refinance for home improvements, then a refinance home loan or modification loan may be possible.
Check your present lender first for home loan modification; they may be able to help you. In most cases they will do this rather than lose you to another company that will. Alternatively search out home loans or loan modification as per the title of this article.
You have already applied in the past for a mortgage so you should be up to speed on what is expected of you.
*TIP* You stand a much better chance if you get a second part time job, the more income you have the less risk you are!
If you want to learn more, check out this lesson 650 Credit Score. It will help you to understand this score and how it can be improved.
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