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Securing Home Loans With Bad Credit: The Best Way To Get Approved

The challenge of securing a home loan with bad credit is not small, but there are ways to get the green light. In fact, with some careful planning, it is quite straightforward.

What is the largest personal debt any of us is likely to willingly accept? It is a mortgage, a debt that often reaches over $200,000, but without which we cannot secure our family home. For many bad credit borrowers, the opportunities to secure a competitive deal are slim, but thankfully, there is always a chance of getting a home loan with bad credit.

How is this possible? Well, as with every loan, securing mortgage approval comes down to the strength of your application more than the status of your credit rating. A credit score, for instance, is a reflection of past repayment habits, and many lenders look upon it as so.

When it comes to granting home loan approval, there are other factors that take precedence over a credit score. And, it is for this reason, submitting a mortgage application even with a poor credit history can end happily.

Bad Credit, And Why It Is A Minor Detail

The biggest mistake that applicants make is to think that their credit history is the key to getting approval. In fact, it plays a very small role, affecting the interest rate a lender will charge rather than anything else. What this means is that getting home loans with bad credit is always a possibility.

But it would be equally wrong to think that credit scores can be ignored completely. This is because if the interest rate charged is high enough, then the monthly repayments will likely become too high to be deemed affordable. It can come as no surprise that affordability is a key factor in securing mortgage approval.

Mortgage providers want to put the low scores in their proper context, which means that they need to see how the score was calculated. This means they will check out your credit report (in great detail), but showing an improved situation perhaps a new job, recently clearing some existing debts etc can convince them to grant the home loan.

Strengthening Your Position

Despite having a minor influence over proceedings, it is well worth making moves to improve your credit score. It can, after all, help to lower monthly repayments and, therefore, make granting a home loan with bad credit a little more plausible.

There is only one way to improve a credit score, and that is to clear existing debts. What is more, it requires some time to accomplish this, and so some careful pre-planning is required. Taking out a consolidation loan makes the task simple, allowing for all debts to be paid off in one go and offering a chance to lower the size of the required monthly repayments.

This type of debt restructuring can greatly help in securing mortgage approval because by buying out existing debts, the credit score improves. And with the total debts restructured through consolidation loans, a lot of extra cash is freed up to use to in any home loan repayments.

Other Ways To Improve Approval Chances

So, other than improving the credit score, what ways are there to enhance the chances of getting an application for a home loan with bad credit approved? Well, it is important that the correct impression is given to the mortgage provider.

The best impression is to show a great responsibility through the commitment that comes with borrowing such large sums of money. Spending time to save a large down payment is a good way to get that message across. If a payment of 20% can be made, it means the size of the required home loan is reduced to 80%.

Another move that can help in securing mortgage approval is to seek a longer mortgage term. This means the mortgage principal is divided into more but smaller sharesComputer Technology Articles, thereby lowering the size of the monthly repayments.

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Lara Sawyer is the author of this article. She works successfully as a financial on Bad Credit Loans Guaranteed Approval. She publishes articles about Guaranteed Bad Credit Loans and others at

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