How to get a mortgage with bad credit? Is it possible? Yes, it is possible for sure. Some people feel afraid about the loan denial due to the bad credit score. But, you are still able to get the loan even though you have bad credit score as long as you can bring the proof of income along the assets and also the relevant explanation of why your credit score is not good. Some lenders in nowadays would give the loan for you even though you have bad credit score. For the instance, credit score is just a piece of puzzle and not the whole puzzle pieces. So, why do not you try?
There is a list of credit score range. 300 – 850 are the lowest and the highest credit score. If someone has higher credit score, it will be considered as the ability of consumer to repay the loan by the lenders. The excellent number of credit score if your numbers reach 740 or higher. The low score is also considered as the “fair” and the “poor”. So, here is the list.
- 740 and above will be considered as excellent.
- 661 up to 739 will be considered as good.
- 601 up to 660 will be considered as fair.
- 501 up to 600 will be considered as poor.
- 500 and below will be considered as bad.
So, if you want to know about how your credit score is, you can take a look to the list above. Each lender has different rules and requirements. You still have your time for learning about each lender for sure. You can also take the list as the first step on how to get a mortgage with bad credit score.
Lenders will recommend the FHA loans for people with low – bad credit score. But they will set the lowest level for credit score in 550 and you will be asked to pay the down payments at least 10% from house costs. Basically, the lenders will be getting less strict with your credit score once they know you have the low – bad one. It also has something to do with your explanation of why your credit score is not good enough. They can see the difference between a person who lost the job and a person who is irresponsible with the loan. If you can bring the proof of on-time rent payments document from last year then it can help you a lot in getting the mortgage.
If you are a borrower that has low or bad credit score, you need to explain that to the lender especially if you have the credit history which is pretty long and in low score. Some of common causes that will drag a borrower to the bad credit score are taken by the lenders as something with less risky factor. The causes are such as the late student loans or medical bill. So, take that as the chance for you to explain to the lender. And those are the steps on how to get a mortgage with bad credit.