|
Mortgage Loans for Bad Credit
Author David Schneider | Nov 14,2007
|
Shopping for a mortgage loan with bad credit is easier than recent media reports suggest. As long as you have made reasonable efforts to stabilize and improve your credit over the last year or two, and as long as you can afford the mortgage payments, you can qualify for a mortgage. To take your first steps towards home ownership you need to understand how to prepare yourself to qualify for a bad credit mortgage.
Qualifying for a Bad Credit Mortgage – Step No. 1
The first thing that you will want to do before you apply for a bad credit mortgage is to examine your financial situation. You can easily do this by requesting a copy of your FICO score and credit history. These financial tools will allow you to see how much debt you have and they will allow you to make corrections to improve your credit profile.
Qualifying for a Bad Credit Mortgage – Step No. 2
The second step is to improve your FICO score as much as you can before you apply for a mortgage. You can do this by paying down your credit cards, by correcting errors on your credit reports, by keeping your credit card accounts in good standing and by not opening any new accounts. These easy steps will help to improve your FICO score by several points.
Qualifying for a Bad Credit Mortgage – Step No. 3
The final step that you will want to take to improve your chances of qualifying for a bad credit mortgage is to make sure your income is large enough. Many mortgages will base how much you can borrow on a percentage of what you make each month. Usually lenders will allow you to borrow an amount that results in a monthly payment that is equal to 30 to 40 percent of your monthly income. This means that if your income is $3,000 a month then you will qualify for a mortgage payment between $900 and $1,200. To qualify for the mortgage payment you want you may need to take a second job, apply for a raise or a promotion, or find other forms of income.
Shopping for a mortgage loan with bad credit is easier than recent media reports suggest. As long as you have made reasonable efforts to stabilize and improve your credit over the last year or two, and as long as you can afford the mortgage payments, you can qualify for a mortgage. To take your first steps towards home ownership you need to understand how to prepare yourself to qualify for a bad credit mortgage.
Qualifying for a Bad Credit Mortgage – Step No. 1
The first thing that you will want to do before you apply for a bad credit mortgage is to examine your financial situation. You can easily do this by requesting a copy of your FICO score and credit history. These financial tools will allow you to see how much debt you have and they will allow you to make corrections to improve your credit profile.
Qualifying for a Bad Credit Mortgage – Step No. 2
The second step is to improve your FICO score as much as you can before you apply for a mortgage. You can do this by paying down your credit cards, by correcting errors on your credit reports, by keeping your credit card accounts in good standing and by not opening any new accounts. These easy steps will help to improve your FICO score by several points.
Qualifying for a Bad Credit Mortgage – Step No. 3
The final step that you will want to take to improve your chances of qualifying for a bad credit mortgage is to make sure your income is large enough. Many mortgages will base how much you can borrow on a percentage of what you make each month. Usually lenders will allow you to borrow an amount that results in a monthly payment that is equal to 30 to 40 percent of your monthly income. This means that if your income is $3,000 a month then you will qualify for a mortgage payment between $900 and $1,200. To qualify for the mortgage payment you want you may need to take a second job, apply for a raise or a promotion, or find other forms of income. |
|
|
Print
E-mail
Del.icio.us
Digg
