Home Loans For People With Very Bad Credit - Improve Your Chances Of Getting Approved

If you have bad credit and are looking for a home loan, there are several strategies you can use to improve your chances of getting approved and securing a reasonable interest rate.

Apply Online: Several online companies will take your application and submit it to hundreds of different lenders. You will receive up to four of the best offers you qualify for. These offers are pre-approvals, meaning you will still need to work with a broker to lock in an interest rate. A key benefit of using these companies is that they will not pull your credit initially, which helps maintain your credit score. Instead, the mortgage company will ask you to describe your credit.

Look Into Down Payment Assistance Programs: Programs like Neighborhood Gold and Nehemiah can help you get a down payment for your loan. Check their requirements to see if you qualify. However, ensure that the lender you plan to work with accepts these programs, as some lenders do not.

Apply With Multiple Mortgage Companies: Applying with 2-3 different mortgage companies can be beneficial. Different lenders have access to various loan programs, so what may be impossible for one lender might be doable for another.

Keep Your Credit Score as High as Possible: Avoid having your credit pulled multiple times, as this can lower your score. Make all payments on time and pay off any amount you can on credit cards. If you have more than one credit card, spread your payments across them to avoid maxing out any lines of credit, which helps improve your credit score.