How to Improve Your Chances to Qualify for a Conventional Home Loan
by: Alexis Dey
Before you give up on the idea that you will never be able to get a home equity loan because of your bad credit, first be sure you can’t get one. It may save you a lot of work, and it opens up more possibilities for home purchases and help from real estate agents.
You might be surprised to find that there are ways you can get conventional financing, even though you never thought you would be able to. More and more lenders are looking at people with less-than-perfect credit. Usually the interest rates are higher than average, but you get into a house. You can refinance later, after showing how you reliable you are making your monthly payments.
Here are a few suggestions to get mortgage companies to look at you. If this method sounds likely for you, try talking to a reputable home loan consultant, and see what your chances are. This would be one of the easiest ways to get into a house.
Can You Fix Your Credit Report?
You might find that your credit is easier to fix than you supposed. Have you seen a copy of your credit report lately? You are entitled to a free copy of your credit report if you have been denied credit, employment, or insurance within the last 60 days. If you were denied because of credit, the company should give you notice and give you the contact information for the credit bureau.
No one can legally remove accurate negative information from a credit report (no matter what those ads say) but you can dispute mistakes or outdated items for free. Request an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Ask the credit-reporting agency for a dispute form or submit your dispute in writing, along with copies of any supporting documentation. You don’t need a credit repair organization to do this. Everything a credit repair clinic cando for you legally, you can do for yourself at little or no cost.
Look into Special Loans for Bad Credit
Concentrate on those lenders who specialize in working with those who have had credit problems. Spending time (and money) applying to lenders who do not work with credit blemishes will accomplish nothing. If you have local sources that you know will consider such loans, take advantage of them.
Other sources, available online, such as Lending Tree, have a large network of lenders nationwide, including those who have experience in dealing with credit problems.
Have a Home Telephone
If you have a telephone in your home and in your name, it helps increase your chances of getting a loan. Lenders worry about people who don’t have a home phone. I know that today a lot of people today use their cellular phones as their home phone, but a land-line still looks better. It shows stability and roots, at least to a bank.
Live in One Place for a While
Again, banks want to see that you have some stability. It helps if you have lived in one place for at least 6 months. If you have just moved, show that you lived somewhere before this for at least 6 months (and hopefully several years).
Have a Good-sized Down Payment
The larger the down payment, the better your chances will be to get a loan. (See “The 30/70 Rule” in the next chapter.) The more money down, the happier the bank is to work with you.
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How to Improve Your Chances to Qualify for a Conventional Home Loan
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About The Author
Alexis Dey
From the book "Buying a Home When You Have Bad Credit-- 12 Ways to Purchase a House When You Can't Get a Home Loan" by Alexis Dey. © 2005-6 Mohave Publishing. All rights reserved.
For more ideas on how to buy a house when you can’t get a home loan, look for our exclusive FREE e-book, “Buying a Home When You Have Bad Credit,” which can only be found on our site at http://I-can-buy.com
For free rent to own agreements, as well as other free real estate contracts and forms to download in PDF format, check out our site at site at http://I-can-buy.com
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