Do you have a bad credit that discourages you from getting a mortgage? You may have bad credit when you missed paying your monthly credit card bills or you have been declared bankrupt. There is a big chance that you’ll get rejected for a loan when your FICO score is below 620, but don’t let this stop you.
While some mortgage companies don’t offer loans to people with bad credit, there are some which do. Using a mortgage calculator in Scottsdale is a good idea, but make sure there wouldn’t be any problem when you are trying to get a loan.
If you’ve been trying to get a loan and failed, fret not. Follow these tips to get a mortgage even after a bad credit record:
Talk to Your Account Provider
Visit your account provider before making any loan applications. Talk to them about the mortgage options they can offer you while having bad credit. In case they can’t make any offer, ask if they can refer you to their contacts who offer mortgage loan for people with bad credit.
Avoid a Loan Shark
You may be tempted, but don’t get a hard-money loan from a loan shark. A loan shark may ask for your properties as the pawn or collateral for the money you are borrowing. Don’t pawn your assets just to get a loan, as this will just bring you down further. Do it the right way to stay out of trouble and avoid a headache.
Make Bad Credit Mortgage Short Term
In case you get approved for this type of loan, try to pay it in less than two years or a little over to improve your credit score. It’s a way to build up your score and make way for a refinance in the future.
Get an Adjustable Rate Mortgage
An adjustable-rate mortgage is influenced by the economic index. Getting this type of loan means the interest rates and your payments will depend on the rise and fall of the index. The initial interest rate for this mortgage is lower than that of a fixed-rate mortgage. An adjustable rate mortgage lets you keep the payments low, helping you in the end with your bad credit score.
Avoid Prepayment Penalty
Prepayment penalty can add to your burden simply because, in essence, you’ll be dealing with six additional months of payments. This works when you pay the loan early on. This isn’t recommended for people with bad credit, as this will only worsen your problems with your score.
Talk to a Credit Repair Company
Your mortgage broker can refer you to a credit repair company for a rapid rescore. They can help you in improving your FICO score and you won’t need to wait long for that. They consider this tactic an industry secret.
Don’t lose hope. These tips can help you get a mortgage loan even if you have less than perfect credit score. Just keep these tips in mind and work your way for a mortgage. In addition, try to improve your FICO score so you won’t have a hard time applying for a mortgage loan again.