Want to buy a house but your credit rating is poor? That is fine. A low credit rating may limit, but not necessarily reject your mortgage application. Despite prevailing industry standards, there are lenders who are more lenient than others are when giving mortgages.
A mortgage is achievable even with less than perfect credit. Do not let a low credit score keep you from buying a house. Try these methods to get the house of your dreams:
Pay your dues on time
Moneylenders consider the person’s capacity to pay financial obligations on time before giving loans, according to the City Creek Mortgage. If you are buying a house, pay your dues on time. Allocate your finances every payday so you will not lack the funds to pay your bills and debts.
Use fewer credit cards
Using too many cards is a common credit card mistake that may keep you from getting a mortgage. It implies that you are paying debt with another debt from different credit card companies. Use fewer credit cards as much as possible. Make sure that your cards have small balances if it is impossible to cut them. This will give an impression that you are good at handling debts.
Pay a higher down payment
Lenders consider the size of the down payment even if you have low credit. Paying a higher down payment will increase your chances of getting a mortgage. It implies that you have enough funds to pay dues. Your down payment should be more than $10,000 or around 10-20% of the house’s market value.
Keep your debt records
Some people remove their debt records, thinking it will affect their loan application. While unpaid debts affect your application, good debts will increase your chances of getting an approval. Lenders will try to find out your financial situation through the extent of your debts. Keep those records, especially those you have fully paid on time. These will support your capacity to pay your financial obligations.
Discuss your situation with a mortgage broker to find lenders willing to accept your housing loan application despite the low credit.