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Getting a Mortgage With Bad Credit

by Mike

So you’re looking to get a mortgage but you’ve made a few mistakes in the past. Maybe you missed a few credit card payments, got sent to collections for medical bills, or even declared bankruptcy. But no matter how bad things might seem right now, it’s not the end of the world.

Even if your credit is less than perfect, you should still be able to secure a mortgage. There are some lenders who will be willing to give you an adverse credit mortgage (also known as a bad credit mortgage). However, you can expect to do a little extra legwork to prove you will be able to repay the loan.

Getting a Mortgage With Bad Credit at Debt Advisory Line

You should also expect to pay a premium for an adverse credit mortgage. Because a borrower with poor credit is statistically more likely to default on his or her loan, the lender charges a higher interest rate. That means your payments will be higher than someone with really good credit even if you actually borrowed less money than they did. It also means that the amount you can borrow will be limited to keep your monthly payment reasonable. The lender may also require you to pay higher closing costs for a bad credit mortgage.

How to Get a Mortgage If You Have Bad Credit

There are a variety of reasons that could make it difficult for you to get a loan. Perhaps you got laid off from work and racked up credit card debt while looking for a new job. Maybe you had a sickness in the family that saddled you with medical bills. Whatever the reasons, it’s important that you show you’re getting back on your feet.

Start by ordering copies of your credit report. Go over them carefully and make sure there are no errors that could be hurting your credit score. If there are mistakes, you can get those corrected or removed which could have an immediate impact on your score.

Assuming your credit report is accurate and your low score is legitimate, it’s time to start rebuilding your credit. Don’t wait until the day before you need a mortgage to start doing this. Plan ahead and start early because the longer you can demonstrate that you’re in control of your debt the more your score will improve. Raise it enough and you might be able to qualify for a lower interest rate, and that could save you thousands of dollars over the life of the loan.

Another wise move would be to get a second job. Working two jobs isn’t easy but the extra money you earn can help you pay down your debt faster. Plus, the additional monthly income will improve your debt to income ratio when the lender runs the numbers for your adverse credit mortgage.

These measures may improve your situation, but they are only the first steps towards regaining your financial independence. Becoming and remaining debt free requires you to incisively change your attitude towards spending. At the Debt Advisory Line, we can assist you with your plans and support you with our hands-on experience for thousands of satisfied customers. Contact us now to find out how we can help you.

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Kalen

You are very right Mike. You need to make sure that you rebuild that credit first. There are many other reasons why you will need good credit than getting a mortgage, but that is one of the big ones. The truth is that you will have a very hard time getting a mortgage with bad credit so rebuilding your credit needs to be a priority before you can move forward. It is important to not only be disciplined about rebuilding your credit, but smart as well. Some people try to pay their debt off too fast and only get themselves even deeper into debt.

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