A 2010 census showed that 61.5% of Americans were homeowners, meaning that most of us will purchase a home at one point or another in our lives. However, that number would show a sharp decrease if a census were conducted on the amount of Americans who can purchase a home outright. The need for individuals to take out a loan in order to finance their home is simply a part of life.
A large percentage of Americans also have a less than desirable credit score, which can make it incredibly hard to acquire a reasonable loan if they can obtain one at all. So, what can someone with a below average score do to finance their home? Thankfully, there are a plethora of lenders online who can help you find home loans with bad credit.
First Things First
Before you begin searching for a home loan, it is important to know your credit score. With sites like Credit Karma you will be able to check your score for free, which will let you know which lenders you can apply to. In most cases, these sites will also show you how you can raise your score as well.
If you would like to raise your score before hunting for a new loan, there are a few things you can do to give it a quick boost. Paying off any existing loans or outstanding bills is a quick way to see that number gain an instant increase. If you own a credit card, try utilizing 30% of your maximum amount each month to see your score rise in no time.
Skip the Bank
Commercial banks are well known for denying applicants with less than desirable credit scores, as they feel it poses more of a risk. Instead, search around online for small personal lender like an independent mortgage broker. Becoming a member of a credit union is another great way to finance your next home.
Credit unions often offer discounts to their members, and are well known for working with their customers on a personal level to help meet their specific needs. Credit score aside, having done business with them in the past is usually all you need for them to offer you a loan. They even offer resources that can help you with your monthly finances, budgeting, and saving money.
Utilizing the internet allows anyone to compare the pros and cons of various lenders, view their business track record, and read customer reviews to see just how great or terrible a lender truly is. Many online sites already stack lenders side by side for you to compare their interest rates, application requirements, and more. Use these to your advantage in order to find the best loan for your credit situation.
Smaller financial institutions offer a higher level of personal care, much like a credit union does. This makes them more flexible to work with, allowing the both of you to come up with a desirable mortgage. Choosing either of the above options is a great way to secure a good loan and boost your credit score over time.
Home Loans With Bad Credit
Don’t let a less than perfect credit score stop you from obtaining a reasonable mortgage to finance your next home. Knowing your credit score ahead of time and giving it a little boost will help you to negotiate a fantastic loan, while choosing a different lender than a major bank will offer you better customer service, lower rates, and payments you can afford. Take charge, get out there and find the mortgage you deserve!
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