Depending on the severity of your bad credit, and how long since you've had bad credit, you may still qualify for a mortgage loan. Before shopping for a bad credit loan, and certainly before shopping for a home, it's a good idea to understand how mortgage lenders approve home loans.
You're Done with Bad Credit: Second Chances are Available!
Don't despair just because you have made some late payments, or even missed a payment on a bill here and there. Mortgage lenders do make bad credit mortgage loans, but knowing in advance what they look for can help you decide when and how to shop for a bad credit mortgage.
Getting a Bad Credit Mortgage: What Happened Then Impacts What Happens Now
Reviewing your credit report can help track your credit history. Typically, a credit report shows how much you owe now, how much you've owed in the past, and how you pay each debt. The information compiled on your credit report is used in calculating your credit score. Consumers can order credit reports once a year at no cost. Credit scores are also available for fee. It's important to check your credit report and ensure that there are no errors. You can also address any negative information contained in your report. If you have filed bankruptcy, had a car repossessed, or have had a mortgage foreclosure, these items can stay on your credit report for seven to ten years. Typically, mortgage lenders can work with you if a couple of years have passed since the event, but you may have to come up with a larger down payment or pay higher interest rates. Mortgage lenders can help you find a bad credit mortgage appropriate to your needs.
About the Author
Karen Lawson is a freelance writer with more than 15 years of experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.