Like many others, you may be riddled with bad credit. Regardless of how you get yourself in this position, your past financial behaviour is influencing your present and your future, and it may make it difficult for you to get a home loan. However, difficult does not mean impossible. Here are 5 ways to get a home loan with bad credit.
Show that you are more financially responsible now
Even though your past decisions are still haunting you, it is essential for you to demonstrate that the past remains in the past and that you have had time to improve. Bring proof that you are making all of your payments on time, that you are able to save, and that your bad score is a thing of the past. Most institutions will take this into consideration and will be able to see that you have learned from your mistakes and turned yourself around for the better. This will increase the likelihood of you getting a loan, even if you have made some questionable financial decisions in the past.
Consult a professional
Did you know that there are specialists who can help you out with your bad credit report? Ask for help from a professional who knows what to do to wipe out some of your bad financial history. With a little luck, you will be able to “clean up” your credit score and arrive at a significantly more positive balance that will make you more attractive in the eyes of lending companies.
Skip the mortgage lenders who take your credit score into account
If you’ve ever tried to get a loan, you will know that most lenders use an automatised system that analyses the suitability of your application based on your credit score. This means that no one is actually looking at it, and you are most likely rejected from the get-go, simply because your credit history is less than stellar. Now, it’s important to know that not all lenders operate this way. Credit score is not relevant to all of them, and you have a much better chance of getting a home loan with bad credit when you go somewhere where they actually look at your application.
Don’t apply to every lender you consider
It may be tempting to just start applying left and right, in the hopes that someone will say yes. However, that is a major mistake, because each and every rejection will show up on your credit report, and it won’t be in your favour. Do some thorough research, inform yourself about the entire process, and then opt for those lenders who are most likely to give you a positive answer. Otherwise, you are just sabotaging yourself.
Opt for a specialist lender and broker
When you are not able to circumvent the system in any way, your only solution may be to choose to work with a specialist lender. This is a company that works with people with bad credit, but be warned that the high level of risk you represent means that the interest rate will rise accordingly. High-interest rates are not ideal, but when all other options are dead-ends, this last resort can be the one that saves you.