Obtaining a new home loan with a bad credit history

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Credit Card Applications » Research » Guides » Building Credit History » Obtaining a new home loan with a bad credit history

Obtaining a new home loan with a bad credit history


Updated: December 26, 2012

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For those with a bad credit history obtaining a mortgage loan is difficult. With a little bit of investigation one can find a satisfactory mortgage loan as it is not impossible. All it requires is a bit of planning and investigation. All options must be considered before choosing the one that would be well suited for one`s individual needs. Some useful tips to follow: • Every consumer is entitled to a credit report once a year from each one of the credit reporting agencies. This can be obtained free of cost. After obtaining the latest credit report take a close look to see the factors that are responsible for bringing down the credit score. One has to be aware of this while applying for new loans. • Try and clear up credit issues as soon as possible. If there are unpaid debts then try to pay them off sooner rather than later. Lenders are more favorable to those who pay up their debts on time. • Ensure that all the necessary financial information is available at your fingertips. This will come in handy while processing the loan application. Keep the pay stubs of the previous year as well as the W-2s of the last two years in hand. Keep all statements of current investments in hand as well. • Obtain all the information with regard to the various types of mortgages that are available. Understand the difference between fixed-rate mortgages as well as adjustable-rate mortgages. Do a thorough research on the repayment terms and conditions on these mortgage loans. The online information that is available is more than sufficient. • Try to opt for the FHA or the VA-guaranteed loan as these are backed by government funding and are available to those who might have had credit issues earlier on. These loan options are available at a reasonable rate of interest, and they also have fixed-rates. • Do a lot of research and shop around for a loan that is best suited for your needs. There are many options to choose from especially for those with bad credits. Never choose a loan option that has high interest rates. Consult with different lenders and choose the one with the least interest rates. Websites are a good place to check and one can obtain all the basic information that one may require. Different lenders will have various offers for people with poor credit. Make a thorough comparison of the interest rates as well as all the fees that are associated with it. • Never hesitate to ask questions and make clarifications with regard to any doubt that you may have. Before signing on the application for the mortgage loan ensure that you have understood all the terms and conditions thoroughly in order to avoid nasty surprises at a later stage. If one is not careful while choosing the mortgage loans, then it is easy to fall into another debt trap and things could get more difficult. Hence individuals must take extra care to opt for the right mortgage loan.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products’ Terms & Conditions on the issuing banks' websites.
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