You really need to purchase a home. But you have a bad credit score. Can you even try getting a home loan, or should you rather rent property instead of buying?
You will be surprised about how many people are asking this question. And, the answer isn’t as simple as a yes or no. These are things you should consider when you want to buy a home with a bad credit score.
Can you really get a home loan with bad credit?
This is the question. Can you really get a home loan with bad credit? Sometimes yes. It depends on why your credit score is low, how low your score is and what lender you are using.
Some lenders are willing to assist buyers with a home loan if they have a low credit score. However, then the credit score should not be too low and you need to prove that you can afford the repayment of the home loan. The only thing you need to remember is that the interest that you are going to pay, is going to be sky-high.
Increasing your credit score is always a good idea
Even if you are going through the process of applying for a home loan, you can still try to increase or improve your credit score. You can pay all your bills on time, and even pay more on each bill than what the premium requirements are. And, if it’s possible repay as many bills as possible before you apply for your mortgage loan.
If you got rejected because of your credit score, take a year and improve your credit score. Then, you can always apply again. No rule says that you can only apply once for a home loan.
Shop around and make sure that you get the best offer
Don’t accept the offer from the first lender. Shop around first and apply to as many lenders as possible. Especially to those lenders that accept people with low credit scores. With a couple of offers coming back to you, you can compare the offers and accept the one with the best premiums and interest. Don’t take the first offer, just because you have a low credit score and are afraid to lose the offer.
Can you apply for a home loan with bad credit? Yes, and sometimes you will even get accepted. Some lenders will consider an application from a low credit score person. But, the interest will be higher and you might pay higher premiums over a shorter term. But, it is possible and you have nothing to lose other than to try getting an approved mortgage loan.
See here for best refinance home loans.