How to Get a Mortgage With Bad Credit

A mortgage is one of the largest purchases a person can make in their life. If you have bad credit, it can be harder to qualify for a mortgage loan.

There are a few things you can do to improve your credit score and bolster your chances of getting a mortgage. First, correct any errors in your credit report that might be lowering your score. You can do this by checking your credit reports for free and calling the credit bureaus to dispute any mistakes on your report.

Second, get a co-signer to help boost your credit and increase the amount you can borrow. This can help you to qualify for a larger loan amount and may allow you to obtain a lower interest rate on your mortgage.

Third, pay down debts to reduce your debt-to-income ratio and make it easier for lenders to approve you for a mortgage. This can be difficult if you have had a lot of missed payments, but it is an important step in building your credit and can help you become a more desirable candidate for a mortgage in the future.

Fourth, shop around for mortgages with good terms and low fees. This will allow you to find the best deal for your situation.

Fifth, if you have poor credit, talk to a Home Lending Advisor who can help you find the right mortgage for your circumstances and work with you to find out whether it’s worth applying for a mortgage now or waiting until you have more credit to apply for a loan.

Sixth, check out our mortgage calculators for a quick overview of how much you can borrow and how much you will have to pay each month. You can also use our mortgage repayment calculator to work out how long it will take you to save for a down payment and pay off your mortgage.

Seventh, if you have a low credit score, you might be able to buy a house with private mortgage insurance (PMI). PMI is an extra fee added to your monthly mortgage payment if you have a down payment of less than 20%.

Eighth, consider getting a government-backed FHA loan. These loans are designed to make it easier for first-time buyers and those with less than ideal credit to own a home.

Nineth, consider taking on a second mortgage to fund your purchase. This can be a great way to get into the market with bad credit, as it can lower your total monthly costs and allow you to build equity in your home.

Tenth, look at what your options are if you don’t qualify for a conventional loan and are interested in an FHA or VA loan. These government-backed loans are generally more expensive than traditional mortgages, but they can make it easier for you to afford a home.

While there are many mortgages available to people with bad credit, it is important to be realistic about your financial ability and the impact that bad credit can have on your purchasing power. This is especially true if your budget is stretched too thin to comfortably afford a mortgage.