Mortgages are incredibly important, as they are a major part of building wealth. Owning your own home has many advantages, such as being able to save money on rent, having somewhere to live after college, and even boosting your credit score by establishing an excellent payment history with your mortgage lender.
However, if you have bad credit, it might seem like you’ll never be able to get a mortgage in the first place. This means that you might never be able to own your own home—but it doesn’t have to be that way! Here’s how to get a mortgage with bad credit.
Five Simple Steps
1) Set up your finances before applying for a mortgage. 2) Pull your credit report from each of the three major bureaus in order to ensure it is accurate and current.
For First-Time Buyers
For many first-time home buyers, landing a mortgage can be one of the biggest obstacles standing in the way of homeownership.
Even if you have great credit and make enough money, finding an affordable loan is far from guaranteed–and may be impossible if you’ve got what lenders call subprime credit or no credit at all.
For People with Accidental Collections or Mistakes on Their Credit Report
While it may seem like you’ll never be able to get approved for a mortgage with bad credit, that simply isn’t true. There are options available even if you have collections on your credit report or mistakes that were made by your lender or by you.
For People Who’ve Had Bankruptcy
So you’ve had a bankruptcy? Or maybe you’re looking at filing for Chapter 7 or Chapter 13 and thinking that it’ll prevent you from getting a mortgage, but you can take heart in knowing that there are lenders out there who will work with borrowers who have been through bankruptcy or other debt issues.
Use our guide to find out how we can help if your bad credit is keeping you from owning your own home today!
For People Who Can’t Put Down 20% Down Payment
The most direct way to improve your credit score is by taking care of your existing debts and making payments on time every month.
If you can’t put down a large enough down payment on your home, ask if there are other options available for people with poor credit scores.
Depending on where you live, you may be able to get a mortgage with only 10% down or even get approved for no money down mortgages.