Ten years ago or more it was so easy to get financed for a home, with no out of pocket money and moderate to low credit. As a matter of fact you could even get a payday advance with no proven source of income. Unfortunately times have changed and mortgage companies have thrown a curve ball at us and, tightened the rains on money they offer to lend.
Now days you must , have a verifiable job and income, at least 5% down some times more, and a credit score of 640 or higher and a large income to receive a low interest and little to no down payment. There are some “bruiser” financiers that you can use that will have a high interest rate as well as a sizeable down payment for credit as low as 550.
Talk to your mortgage broker and see what is available to you. As well as educate yourself by obtaining your credit report from all three credit reporting agencies, (Trans Union, Experian, and Equifax) this will give you a idea of what you need to pay to get your credit higher.
If you are late or have missed some payments hold off on applying for a loan in tells you have your payments up to date. Make sure you owe all of the debts the report says you do, if you find an error don’t hesitate to dispute the debt with the credit agencies.
There are many ways and some loop holes to help you get your credit up to where it needs to be. You can open a secured credit card, with a bank (make sure they report it to your credit report) this is almost like a pre paid credit card. You could get a store card, or be a user on a person’s card that has a great payment history. If you do currently have credit cards reduce you’re spending on them as well as the balance up to 30% or less of the cards limit. If you have files for bankruptcy or have received a foreclosed on a home, it is wise to wait a few years to apply for a new loan.
If you have accounts in collections or accounts that have been “charged off” I recommend you get them removed if you can. Play “let’s make a deal” with these companies, ask if you pay in full will they remove it from your credit score, make sure you get something in writing, If they won’t take it of your credit paying them won’t help your credit much.
Make sure to ask your mortgage broker to help you determine what you need to do to lower your credit and make your credit score higher. So you can get in to the home you want.
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