Mortgage Loans With Bad Credit: Simple Measures to Improve Approval Chances

It is no secret that mortgage providers, like all lenders, prefer applicants who have their application forms in perfect order. But this does not refer to information being given neatly; rather, it means all of the necessary boxes are ticked. When applying for mortgage loans with bad credit, this small factor can make a difference.This is no fanciful idea. An impressed lender is more likely to approve an application, even if it has some minor risk of being defaulted upon. So, mortgage approval despite poor credit scores is always possible if the application is strong enough.But how can an application for a mortgage loan be strengthened sufficiently when the applicant is a bad credit borrower? Taking just a few small measures can make all the difference. We have listed just 3 of them, but together they may be enough to see the mortgage approved regardless of your credit rating.Increase The Down PaymentWhen the size of a mortgage and its repayments are the problem, the logical solution is to reduce the mortgage sum. This can easily be done by making a larger down payment, thus leaving a smaller share of the purchase price remaining. Getting a mortgage loan with bad credit is more likely when the mortgage sum is smaller.The logic is this: with a $200,000 home, a 10% down payment would leave $180,000 mortgage required. But if the down payment were 20%, then $160,000 is required. The difference can mean savings of as much as $200 per month. And with that kind of savings, approval despite poor credit scores is more probable.The only problem is in raising the cash sum to use as the down payment. $40,000 can be a challenge to save, especially when trying to handle the general monthly expenses too. So, securing the mortgage loan may need a little time.Improve Your Credit StatusWhile a credit score only has a minor influence over the approval process, there is no doubt that it does have an influence over the interest rate charged.  When seeking mortgage loans with bad credit, it is only to be expected that a higher than usual interest rate be charged. This effectively increases the size of the monthly repayments.What this means is that by improving your credit score, and status, the cost of the mortgage will fall. And with the lower interest rate, the repayments become that little more affordable ensuring approval despite poor credit scores is likely.But that is only part of the advantage. The fact that something was done to improve the score is impressive too. Many lenders take it as a sign of the mature commitment the applicant has to the mortgage loan - and this bodes well in the long run.Be Realistic In Your ApplicationA third and final recommendation is that the overall mortgage sum sought is within reason, and within a realistic budget. All too often an applicant seeks a large mortgage loan with bad credit, too large be considered affordable, and so it is rejected.Securing approval despite poor credit scores is dependent on keeping things real. Simply compare your total monthly outgoings with your total monthly income to see what your excess income is, then calculate 40% of it. That is the maximum monthly repayment acceptable, and your maximum mortgage loan can be calculated from that.