Searching for Home Loans but Have Bad Credit? | Let us Help you with that
In 2019 getting a home loan is not an easy task. And especially after that 2008 market crash, having home ownership become a dream. And even after that with bad credit, it seems impossible, but you have good news!! Many lenders help with this. For example, to get an FHA loan with the lowest down payment requirement (10%), the credit score should be 500 or above, and 3.5% with 580 credit score. But there are some points to be considered:-
Points to be considered before applying for a loan
- Income consistency - Keeping the same job/income for at least two years.
- Low debt to income ratio - Loan programs also have a maximum debt ratio allowances.
- No outstanding debt - Lower debt often means a higher likelihood of timely mortgage payments.
- Assets saved and available for use – By asking this, they want to check if there is some reserve that could be used get the repayment if in case you are not able to pay.
- Paying equal rent payments – No payment shock –
- If you have gone through a bankruptcy, you should wait at least two years after the discharge. You should consult with an educated bankruptcy attorney if you are considering this option. Now here comes the question of how much can a loan with bad credit costs, Let me explain:-
How much can loan with bad credit costs
When here you’re reading about how to apply for Bad Credit Home Loans, Let me also inform you that when you get a loan with Bad Credit, you’ll probably have to pay higher interest rates. Let me explain with an example,
Let’s suppose, your car breaks down, and you need a personal loan of $2,500 to pay for the repair. If your credit is outstanding (If FICO® scores of 740), There is a possibility of you being qualified for a personal loan at a low-interest rate of 9.33% for three years. You might want to go for a monthly payment of $79.88.
To conclude it up, how much loan you would be getting at what rate, depends on your credit score. It can affect your loan eligibility, interest rate, and the period of loan you can borrow. So, it is essential that everyone should be cautious about credit score and make every possible effort to better.
