How to Secure a Mortgage with Bad Credit?
Bad credit mortgage is a type of home loan that you can get even if your credit rating is not the greatest. Of course, this kind of loan comes with some restrictions and limitations. This is to ensure the lenders or the financial institution that they are not risking with someone who has troubles paying the money back.
Here are some things you can do to secure a mortgage with bad credit:
- Analyse Your Credit File
Over two million Australians are at risk of having bad credit, and they don’t even know about it. So, if you want to apply for a bad credit mortgage, you will have to get a copy of your credit file and do some cold, hard thinking.
With that copy in your hands, you can go to a bad credit repair service and increase your chances of getting a mortgage. You can also discuss with your lender and come to an agreement.
One benefit of improving your bad credit is that you might eliminate a few restrictions for your home loan. Thus, you will be able to get an offer that suits you best.
- One Loan and One Loan Only
It may be tempting at first but try not to get too many loans in a short period. Get only one so you can control your finances better. This way, you won’t have to worry about doing more damage to your credit history. It’s enough that you applied for a bad credit mortgage; you don’t need to apply for bankruptcy as well.
- Communicate with Your Lender
Your lender is a human being. So, it’s recommended that you talk to him and explain each default or negative mark from your credit history before you apply for a bad credit mortgage.
This will make the lender understand that some of those bad points aren’t there because of your fault. A lender who is understanding is more likely to give you the loan you need without too many restrictions or limitations.
- The Holy Grail of Cleaning Bad Credit
In order to improve your bad rating, you will have to pay your debts and taxes, even the past ones. This will ensure that you’ll get some positive points on your credit history. As a result, you will increase your chances of getting a bad credit mortgage.
- Outstanding Debts
Past credit mishaps need to go first, so set a priority for them before going to a mortgage lender. A lender will risk a lot if he accepts to give a loan to someone who didn’t even pay his past debts. So, be careful with those.
So, as you can see, it is possible to secure a mortgage with bad credit. Still, before you do this, you should try to repair your rating by using a bad credit repair service or by paying your debts.
Being honest to your lender is another way of increasing your chances of getting a bad credit mortgage and it’s also highly recommended.