In an ideal world, everyone who wanted to purchase a house would have a great credit score, high and steady income, and 20 percent down for a down payment. However, this is simply not the case. Instead, there are many people who feel like they can afford a home and are ready to purchase, but don't have the best credit score. Luckily, there is still hope. Here are some things that you can do to help get qualified for a home loan, even if your credit score is less than perfect.
1. Get An FHA Loan
There are certain loans that are backed up by the government. These loans are put in place to help first time homebuyers, veterans and other people who might not be able to get a loan get into a house. Many times these programs don't require you to have a large down payment, and they don't have as strict requirements when it comes to credit scores. When you talk to the mortgage lender, let them know about your credit score. By giving them a heads up that it might be low, it can help them decide what kind of loan would be best for you.
2. Buy Low In Your Budget
If your credit score is low, but you have a good income, then you might want to consider buying a house that is lower in your budget. Say that you could afford a $2,000 mortgage payment. But with a poor credit score, the lender will be less incentivized to lend you the money if it is right at your debt to income max. Instead, try going for something that is far lower than what you could "afford." That way the banks won't be nearly as worried about you making your payments since they see you can easily afford it.
3. Be Honest With Your Lender
Before the lender actually goes through the process of getting your approved, or closing on the house, they will want you to give them hard numbers. You might be tempted to inflate these numbers to help your chances. But eventually you will have to provide all the documentation to prove everything. If you have not been straightforward about income, credit score, debt and much more, you could be in trouble. Additionally, if you have many lenders pull your credit score it could hurt it even more. This is why it is better to be honest at the beginning, and see what they can do for you, before you have them pull your credit and try to get you approved.
If you have specific questions about home loans, contact a business like Dynamic Mortgage Concepts Inc to learn about what your options are.