| Buying a house is in reach for those with poor credit histories.
Even with bad credit, you can secure a mortgage with reasonable
rates and terms. Before you assume you have a low credit score,
check your credit report. If you do have adverse credit, plan on
getting the best rates possible by following these three tips.
Up Your Down Payment
Besides your credit report, your down payment will greatly affect
the rates you qualify for. In some cases, it’s possible to
qualify for conventional rates with a large enough down payment.
If you have an especially low score due to a recent bankruptcy
or foreclosure in the last year, you may be required to put down
50% of the home’s value. It is possible to get a mortgage
with no cash down, but your rates will be much higher.
Be Flexible With Your Terms
Your loan’s terms can also vary rates within a point or two.
Adjustable rate mortgages will start out about a point less than
fixed rate mortgages. This will also help you qualify for a larger
mortgage. But you may find your rates and payments increase in the
future with an ARM.
The shorter your home loan, the lower your rates. You will also
save thousands in interest cost simply by having a shorter loan.
Some lenders have additional discounts for automatic payments.
You also have the option of buying down rates, which can be a real
savings if you keep your loan for several years.
Take Time To Compare Lending Offers
Taking the time to compare lending offers is the surest way to
save money on your mortgage. A difference as little as an eighth
of a point will save you thousands on interest. So just like you
spend hours searching for just the right house, so you should spend
time researching lenders.
With online financing companies, you can quickly gather information
to make your mortgage decision. Mortgage broker sites can get you
multiple loan estimates in minutes. You can also get loan quotes
through individual lender sites without hurting your credit score.
by Carrie Reeder
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