Five Tips For Folks With Bad Credit Who Want Home Mortgage Loans

If you have bad credit, finding funds to finance your dream of home ownership will not be a walk in the park, but there are lenders out there who want to help you. Just be persistent and do not restrict yourself to one lender and then give up. Here are five tips when you start your quest for bad credit home mortgage loans.Tip One: Find a Good DealFinding a property that already has some equity when you purchase could mean an easier path to financing with a bad credit home mortgage loan. Lenders may view it almost as favorably as a down payment. They may even consider the loan to value ratio of the property. Check with your broker to see if this might help you.Tip Two: Be CreativeCreative financing could help your quest for a bad credit home mortgage loan. Maybe the seller would carry back a second mortgage on the property. For instance, you could set up a contract with the seller that would require you to make monthly payments of $150 on $10,000 of the price of the property as a second mortgage. Then make the agreement that the entire amount would be due within 10 years. That will allow you time to refinance and the seller will not feel permanently locked into a contract.Tip Three: Down PaymentsEven with bad credit, borrowers may qualify for 100% financing, but the interest rate could be considerably lower if you were able to put down between 3-5%. Save as much as possible for a down payment. Indeed, it may be advantageous to wait six months to get a home loan so you can build your down payment. Of course, if you cannot wait and do not have a down payment, you can aim for refinancing at a later date.Tip Four: Shop DiligentlyYou may get a flat refusal from one broker and then turn around and get another broker who will end over backwards for you. Do not be led into the trap that if one broker cannot help you, no broker can. Indeed, brokers are different in the kind of deals they can execute. They may have a relationship with a flexible mortgage lender. Online brokers are a good venue for shopping by putting your need out there and waiting for the responses. This is good because your credit record only takes one hit for quotes from various lenders.Tip Five: Credit ScoresSome really simple acts can improve your credit scores without a lot of extra effort. All three of the major credit bureau – Experian, Equifax, TransUnion – have websites where you can dispute incorrect items on your credit report. It is an easy and quick process. Of course, keep all current bills on time. Keep your credit inquiries to a minimum since too many queries can make you look desperate. While you are in the process of landing financing, do not open any new credit cards, auto loans, or any other credit transaction.Home Mortgage Bottom LineDo not let bad credit squelch your quest for home ownership. With the right moves, you should be able to land a bad credit home mortgage loan.