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Basic Tips to Obtain a Mortgage Loan Approval

By Michele Lerner
Mortgage Credit Problems Columnist


Bad credit mortgage lenders are available to help consumers with a poor credit rating, but the first step needs to be taken by individuals looking for bad credit loans. If you think you have bad credit, you search for the lowest mortgage rates by filling out the poor credit mortgage application on this page.

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The American Bankers Association (ABA) has advice for anyone preparing to purchase a home, regardless of whether they need a conventional loan or they need a bad credit home loan. If you have good credit, these tips can be easy to follow, but if you have already hurt your credit score you may need a little time to rebuild your credit before looking for poor credit home loans.

Qualifying for Bad Credit Loans

Even if you have bad credit, you still qualify for a poor credit mortgage if:

  • You can prove that your credit is improving
  • You have a steady job with good income
  • You can make a higher down payment
  • You have lowered your debt-to-income ratio by paying down your debts

ABA Homeownership Tips

The ABA says there are four areas consumers need to work on to qualify for a mortgage loan:

  • Saving. Most lenders require a down payment. Bad credit mortgage lenders are more willing to work with consumers who have some cash for a down payment and closing costs. You can also use cash to "buy down" a high interest rate to a lower rate.
  • Managing Credit. Even if you need a poor credit mortgage, you can improve your credit score quickly by paying bills on time, avoiding closing old accounts, and checking your credit report annually.
  • Lowering Debt. About 30% of your credit score is based on your debt, so if you can find a way to pay it down you may find it easier to improve your score and qualify for a mortgage for bad credit.
  • Budgeting. Develop a financial plan so that next time you apply for a home loan you do not need to look for bad credit mortgage lenders.

Find the best mortgage rates from multiple bad credit mortgage lenders by filling out the form on this page. The best way to move forward to buy a home is to start working with a lender to see what you can afford.

Sources

http://www.aba.com

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