Tips to attain home loan with poor credit
You can easily apply for a bad credit home loan despite your poor credit report. But the interest on the home loan might not be as low as you get with a good credit report. Therefore, it might be difficult to get a loan at an affordable interest rate in this present market.
But here are the following ways to get a loan despite your poor credit report if you have a stable income.
- 1. You are required to find out the interest rate on a bad credit loan and compare it with the interest on the home loan for consumers with good credit. Make sure that you take out your annual credit report so that you can estimate your interest rate on your home loan. You can shop for home loans at an affordable interest rate if you consider your credit score to be decent enough.
- 2. Try to reestablish your credit by putting extra money towards paying off your debts. If you keep your credit balance lower than 50% or less then you can easily improve your credit report. If you start paying off your debts then you can conveniently boost your credit report. Once your credit score increases then it will not be easy to get a home loan at an affordable interest rate.
- 3. You can shop around for affordable interest rates on your home loan. Make sure that you compare the interest rate on each loan offered by different lenders as it will help you select the loan that will be affordable to pay off. Remember that the interest rate on your home loan will depend on your debt to income ratio. If your debt to income ratio is high then the interest rate on the home loan will be high as well.
- 4. You can take out an FHA loan if you are looking for a low-interest rate on your home loan. When you get a loan through Federal Housing Administration then your eligibility will not be determined through your credit score. You are required to make a down payment of 3% of the price of the house. Therefore, the interest rate on this loan will be affordable despite your poor credit report.
Therefore, these are the four ways you can get a home loan an affordable interest rate despite your bad credit history.
