Author Box
Articles Categories
All Categories
Articles Resources

Mortgage Loans With Bad Credit: Take These Three Steps to Better Your Chances

June 10, 2012 | Comments: 0 | Views: 171

For many people with bad credit, mortgage loans seem like a very slim possibility. They believe that the key to getting a mortgage is their credit score which means there is no way for them to succeed. However, the determination of mortgage loans is actually based on far more than just one, three-digit number. In fact, people with good credit can get denied.

Rather than focus on credit alone, the determination by a lender to grant a mortgage loan is far more complex. If you have bad credit and want a mortgage loan, there are real steps that you can take in order to increase your chances of getting the loan you need. Remember this: a lender only wants one thing from you when he gives you a mortgage loan with bad credit or good credit, on-time repayment. The key is proving to the lender that this is a possibility.

The Importance of a Good Ratio

Good credit does not guarantee that a person can get a mortgage loan the same way that bad credit does not doom them to rejection. That is because mortgage loans are based on several criteria that look at a borrower's past, present, and future in finance. Principle among these considerations is the current ratio of that borrower's income and debts. When it comes to this ratio, the golden number is 40. No more than 40% of your current income can be assigned to the repayment of existing debt. In other words, if you make $10,000 a month, only $4,000 should be going to pay off existing debt. Otherwise, the addition of a mortgage loan would stretch your available income too far.

Show Them You Have Changed

Along the lines of debt, lenders will consider you for a mortgage loan with bad credit if the reasons for your bad credit are behind you. It is well known that it is easy to ruin your credit, but harder to build it back up. Facing a crisis years ago, perhaps a sudden job loss or a medical disaster, may have sent your credit plummeting. However, if you have spent all the time since then getting back on your feet and resuming responsible financial management practices, lenders will respond to that change.

Emergencies happen. What you need to show is that, outside of the unavoidable, you can do what it takes to manage your money and repay your debts.

The Smaller the Loan, the Easier the Approval

It's easier to get small loans than large ones. Therefore, you should take the value of your mortgage loan into consideration. With bad credit, the less money you ask for the more likely you are to get approved. There are two ways that you can work to lower the amount of money you need. First, save up a large sum for a down payment. The more cash at hand, the less credit is needed. Next, consider changing the amount of money you plan to spend on the home you want. Look for deals, consider smaller properties, or look into different areas where home prices are more reasonable.

Don't Give Up Hope

The final step that you can take towards homeownership and getting a mortgage loan with bad credit is making sure to keep your goal in mind and your outlook positive. If you still cannot get a loan after following this advice you are not lost forever. Continue to work on responsibly repaying the bills you currently have, eliminating debt, and improving your credit score. Over time, that bad credit will become less so and the mortgage loan you need will be easy to achieve.

Joycelyn Crawford is an expert in Easy Loans for Bad Credit and Easy Home Equity Loan. Visit her site at

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Mortgage Loan With Bad Credit


Bad Credit Home Loan


Guaranteed Home Loans With Bad Credit


Easy Loan

The documents are inevitable to assess your age, income, employment and residence. For the loan to be petitioned from the bank, you need the right procedure of application.The documents are

By: Simon Liva l Real Estate > Buying l November 20, 2012 lViews: 258

The main reason why people tend to be apprehensive about moving homes is that it entails packing everything in the home, transporting it and then unpacking it in the new home. The entire process of

By: Ringo Star l Real Estate > Moving Relocating l October 27, 2012 lViews: 211

There are a number of benefits to owning a second home. Buying to let is a long term investment. The property will usually accumulate value over time and also can generate rent on a shorter term

By: Alan Trotter l Real Estate > Investing in Real Estate l October 19, 2012 lViews: 241

Building a home, especially your first one, can be an incredibly daunting task - there are a number of factors, including budget and planning, that must be taken into account before any sort of

By: John K. Taylor l Real Estate > Building a Home l July 10, 2012 lViews: 333

When you're ready to sell your house, the first thing you'll probably do is find a real estate agent to help you through the process. It can be so inviting to seek out the discount Realtors who offer

By: W Josh Anderson l Real Estate > Selling l July 10, 2012 lViews: 263

You see the signs everywhere, especially in a strong economy: For Sale By Owner. For some reason, many people believe they'll do a better job of selling their homes without the assistance of a real

By: W Josh Anderson l Real Estate > Selling l July 10, 2012 lViews: 241

This is the question many property owners might have when they are thinking about re-financing their house. The fact is that the answer for this question is a rather complicated one and the correct

By: Demetrius Weatherspoonl Real Estate > Mortgage Refinancel July 05, 2012 lViews: 178

Getting rejected for a mortgage loan is upsetting especially if you are borrowing it for something important like a home loan. Therefore, before applying for one, make sure that you are qualified for

By: Dawie Besterl Real Estate > Mortgage Refinancel July 05, 2012 lViews: 192

For years, underwater borrowers who remained current on their mortgages were forgotten and forsaken. At last, they have options. Here are the details.

By: Bill Irelandl Real Estate > Mortgage Refinancel July 05, 2012 lViews: 174

  Such is the strength of the Brazilian mortgage market at present; a number of the biggest banks in Brazil and across the globe are locked in intense competition in order to gain a bigger share of

By: Waseem Saddiquel Real Estate > Mortgage Refinancel July 03, 2012 lViews: 200

A mortgage originator (also known as "loan officer") is an employee of the mortgage lender responsible for processing mortgage transactions to lenders and borrowers. The originator is also

By: Dawie Besterl Real Estate > Mortgage Refinancel July 02, 2012 lViews: 177

Mortgage refinance loans with bad credit exist. However, before moving forward in your search, understand the options available and where you fit into the equation.

By: Donna N Hammondl Real Estate > Mortgage Refinancel July 02, 2012 lViews: 158

Military members are offered an additional lending tool known as a military loan. These loans are offered in amounts up to $20,000 and even those with bad credit can qualify under certain conditions.

By: Joycelyn Crawfordl Finance > VA Loansl July 02, 2012 lViews: 139

Borrowers with bad credit can get a $10,000 personal loan. However, to achieve this goal, these borrowers need to consider more than the simple factor of need, but also look at the purpose of their

By: Joycelyn Crawfordl Finance > Personal Loansl March 14, 2012 lViews: 142

With bad credit, the chances of getting approval for auto or even military loans can be reduced greatly. But with no credit check loans, the issue of low credit scores is removed from the equation.

By: Joycelyn Crawfordl Finance > VA Loansl March 05, 2012 lViews: 134

When people have bad credit, student loans are still available for them. These loans carry a low, fixed interest and can help support you through gaining a higher education.

By: Joycelyn Crawfordl Finance > Student Loansl February 27, 2012 lViews: 166

The lending market has changed substantially from what it once was. Today, getting a loan with bad credit is possible through payday loans, which have no credit check and provide fast cash relief.

By: Joycelyn Crawfordl Finance > PayDay Loansl February 27, 2012 lViews: 217

If you have bad credit you may feel that the option to refinance your mortgage is not available to you. However, if done correctly, refinancing your mortgage can pay off for you in the end.

By: Joycelyn Crawfordl Real Estate > Mortgage Refinancel February 22, 2012 lViews: 117

Discuss this Article

comments powered by Disqus