Should You Consolidate Your Debt?
If your in the market for a home loan, however your credit isnít all that you would like for it to be, itís important that you know that there is some hope. It wonít be as easy as someone with spotless credit of course, but it is possible. Actually, right now itís easier than ever to get a home loan with bad credit to be honest. There are some things that you can do to increase your chance. Here they are: Find a property with built in equity. If you can find a home that already has equity, it may be much more simple to getting a loan on the property.
To the lender, this could mean that youíve already made some down payments on that property. Youíll have to consult a mortgage broker to see how this helps you. Be creative in your financing. Maybe the seller will take a second mortgage on the property in fact. You can save a down payment by entering into a contract with the seller that youíll make monthly payments with interest in lieu of a down payment.
This is actually sometimes referred to as a lease option. These days there are a ton of lenders that will give you a one hundred percent financing, that is if you have a good credit score. However, paying a down payment will lower your interest rate significantly. If itís a timing concern, and you think that in a few months youíll be able to have saved enough for a down payment, then itís probably better to wait, if saving on your interest rate is important to you. This is good financial planning on your part since youíre planning ahead for a lower interest rate. One thing to consider on that note however is that if itís a mortgage that you feel you must take now, and that any amount of time is not going to help you, then the option of refinancing is always there for you down the road. Donít believe mortgage brokers when they tell you that they canít do anything for you. You have to keep shopping for one that will, since some brokers are more flexible than others, due to good relationships that they have with the lenders directly. One way to increase your chances is to go with an online service, that will submit your application to various lenders, basically letting them fight for your business, giving you a bit of an advantage. Even then however, your loan application can get turned down if your credit is that bad.
At this point it may be a good idea for you to take a good look at your problem, get credit counseling, and consolidate debt if necessary. It may hurt to wait for that loan, but will only be helping your future, instead of digging your hole even deeper.