How Do People With Bad Credit Get Approved To Buy A House?

Summary

Having bad credit does not have to stop you from buying a property.

Here is some help for you in getting approved.

Basics

For starters there are many mortgage sources out there, including:

• commercial banks
• credit unions
• mortgage banks
• mortgage brokers

If you have been rejected for a loan by one of them do not be discouraged.

There are many different types of lenders with different lending criteria. What one lender may find unworkable will be acceptable to another lender.

There are many mortgage lenders and mortgage brokers who specialize in working with people who have bad credit.

Loan Requirements

Many mortgage lenders require a borrower to disclosure:

• income
• assets
• employment

For many people with bad credit some or all of these areas may be problems.

There are mortgage lenders that offer loans where a borrower does not have to prove income, assets, or employment. Some lenders may require 1 or 2 of these different loan factors but not all three.

Some borrowers may have hard to document income. Other borrowers wants to keep their financial records private.

Ask the mortgage lender how much documentation they will need. Many lenders will offer the same loan for borrowers with and without documentation. They will simply offer the loans with different terms. This usually means that the less paperwork you show in support of your mortgage application they higher your interest rate will be.

Down Payment

The more cash you are willing to put down on a property the more likely you are to be approved for your mortgage.

This can be one of your strongest leverage points to get approved.

If you find that the interest rate being offered is too high see if you can "buy down" the loan. This is when you pay the mortgage lender up front in exchange for a lower interest rate.