How To Improve Your Chances To Qualify For A Conventional Home Loan

How To Improve Your Chances To Qualify For A Conventional Home Loan

Before you​ give up on​ the​ idea that you​ will never be able to​ get a​ home equity loan because of​ your bad credit,​ first be sure you​ can’t get one. it​ may save you​ a​ lot of​ work,​ and it​ opens up more possibilities for home purchases and help from real estate agents.

You might be surprised to​ find that there are ways you​ can get conventional financing,​ even though you​ never thought you​ would be able to. More and more lenders are looking at​ people with less-than-perfect credit. Usually the​ interest rates are higher than average,​ but you​ get into a​ house. you​ can refinance later,​ after showing how you​ reliable you​ are making your monthly payments.

Here are a​ few suggestions to​ get mortgage companies to​ look at​ you. if​ this method sounds likely for you,​ try talking to​ a​ reputable home loan consultant,​ and see what your chances are. This would be one of​ the​ easiest ways to​ get into a​ house.

Can you​ Fix Your Credit Report?

You might find that your credit is​ easier to​ fix than you​ supposed. Have you​ seen a​ copy of​ your credit report lately? you​ are entitled to​ a​ free copy of​ your credit report if​ you​ have been denied credit,​ employment,​ or​ insurance within the​ last 60 days. if​ you​ were denied because of​ credit,​ the​ company should give you​ notice and give you​ the​ contact information for the​ credit bureau.

No one can legally remove accurate negative information from a​ credit report (no matter what those ads say) but you​ can dispute mistakes or​ outdated items for free. Request an​ investigation of​ information in​ your file that you​ dispute as​ inaccurate or​ incomplete. There is​ no charge for this. Ask the​ credit-reporting agency for a​ dispute form or​ submit your dispute in​ writing,​ along with copies of​ any supporting documentation. you​ don’t need a​ credit repair organization to​ do this. Everything a​ credit repair clinic cando for you​ legally,​ you​ can do for yourself at​ little or​ no cost.

Look into Special Loans for Bad Credit

Concentrate on​ those lenders who specialize in​ working with those who have had credit problems. Spending time (and money) applying to​ lenders who do not work with credit blemishes will accomplish nothing. if​ you​ have local sources that you​ know will consider such loans,​ take advantage of​ them.

Other sources,​ available online,​ such as​ Lending Tree,​ have a​ large network of​ lenders nationwide,​ including those who have experience in​ dealing with credit problems.

Have a​ Home Telephone

If you​ have a​ telephone in​ your home and in​ your name,​ it​ helps increase your chances of​ getting a​ loan. Lenders worry about people who don’t have a​ home phone. I know that today a​ lot of​ people today use their cellular phones as​ their home phone,​ but a​ land-line still looks better. it​ shows stability and roots,​ at​ least to​ a​ bank.

Live in​ One Place for a​ While

Again,​ banks want to​ see that you​ have some stability. it​ helps if​ you​ have lived in​ one place for at​ least 6 months. if​ you​ have just moved,​ show that you​ lived somewhere before this for at​ least 6 months (and hopefully several years).

Have a​ Good-sized Down Payment

The larger the​ down payment,​ the​ better your chances will be to​ get a​ loan. (See “The 30/70 Rule” in​ the​ next chapter.) the​ more money down,​ the​ happier the​ bank is​ to​ work with you.

And if​ you​ can show that you​ have saved the​ money over a​ period of​ time,​ instead of​ borrowing it,​ it​ looks even better to​ some lenders. Not all lenders ask where you​ got the​ money,​ so if​ you​ did save it,​ be sure to​ point that out.

Show That you​ Have Good Character

Banks and lenders want to​ know that you​ are dependable and reliable. Show this when you​ talk to​ them by showing up to​ meetings on​ time,​ dressing nicely,​ and having your information organized. Have your bank account and credit card account numbers and financial information ready to​ show them.

It will help if​ you​ have someone you​ know write you​ a​ financial letter of​ reference,​ such as​ someone whom you​ borrowed money from and who you​ paid the​ money back to.

Be ready to​ show them any sources of​ credit you​ may have that may not be on​ your credit history,​ such as​ paying the​ cable or​ cellular bills regularly. Even information about a​ loan from a​ relative or​ friend that was paid back in​ installments and on​ time will help. Be ready to​ tell them how you​ will be able to​ pay this loan back.

Use Any Collateral you​ May Have For a​ Personal Loan

Maybe you​ have something of​ value that you​ can use for collateral for a​ personal loan. This might be a​ good way to​ come up with a​ down payment.

Some of​ the​ things banks will consider for collateral are:

Gold and precious metals
Other Real Estate,​ such as​ land

Have a​ Relative or​ Friend Co-sign the​ Loan

This is​ a​ time-honored way of​ getting a​ home. Often close relatives or​ friends will help someone they care about who is​ in​ need. Sometimes all it​ takes is​ to​ ask. you​ can also get someone else to​ buy the​ house for you​ and later be added to​ the​ mortgage and quit-claimed to​ the​ deed. Check your state laws on​ the​ subject.

Increase Your Income

Get a​ second job. This can just be for a​ while. the​ increase in​ salary may be enough to​ qualify you​ for a​ loan. Also it​ gives you​ extra income to​ save for a​ down payment or​ pay off debts and fix your credit.

Start a​ small home business to​ bring in​ extra income. Be careful there-- a​ small business can be costly to​ start and run,​ and may not bring in​ much income for a​ while. But it​ works for many people. Do your research before you​ start. Weigh the​ risks and advantages.

Ask For Help

Ask for help from your church,​ synagogue or​ other nonprofit organization. Some government programs and organizations will help you​ with financing or​ other housing options. Check out our website for links to​ many of​ the​ organizations that help people get into homes of​ their own.

How To Improve Your Chances To Qualify For A Conventional Home Loan

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