Low Credit Score Home Loans
Are you looking for a home and have a credit score below 620?
You will probably have to obtain a low credit score home loan.
Knowing how to prepare and what to look for will make the
process easier.
These are the Best of the Best:
(updated )
The average rate of interest on mortgage loans continues to fall and has been under 5 percent for almost all of this past year, with this recent round of rate cuts seen as the lowest for borrowers in years. The reason, many borrowers today have bad or at least less than perfect credit scores. Still a borrower with less then perfect credit an jump through a few hoops and get a fairly decen rate on a loan.
Know your credit - Pull a credit report and find out your
exact FICO score. Examine your credit report for any errors.
Immediately report any discrepancies on your credit report.
Prepare your documents - Assemble a personal history
file. You should have your tax returns for at least the last two
years. Have pay stubs for a full calendar year or an income
verification letter from your employer.
Save for a down payment - Every dollar put down makes
getting a low credit score home loan easier. Down payments may
also help you get a lower interest rate and a lower monthly
payment.
Shop for lenders - Even borrowers with low credit scores
will find numerous home loan lenders. Select several to
interview. Check their backgrounds with the Better Business
Bureau or obtain references from friends. Arrange to meet with
your chosen loan agents. Discuss the amount of mortgage you can
afford and the type of loan your credit will require. Even with
a low credit score you may be able to pre-qualify for a loan.
Pre-qualifying makes the actual hunt for a home much easier.
Negotiate terms - The low credit score home loan market
is very competitive. Don't be afraid to negotiate and don't be
intimidated by the lenders. Ask if better terms are available.
|
