subject: Making The Best Of The Bad Credit Mortgage [print this page] Before you set out to look for a bad credit mortgage, here are some things you can do to help speed up the process and save you as much money as possible.
The first thing, though, is to have faith that not only are you not the only one in need of a bad credit finance but that there is plenty of hope that you will get a mortgage and at a rate you can live with. You might even save yourself some money.
Many homebuyers, especially those first time buyers who don't understand the way the market works, worry needlessly that their bad credit will prevent their securing a mortgage at all. Seldom, if ever, is that actually the case. In recent years the news has become better than ever for securing a good, reasonably priced adverse credit mortgage. The reason for the changes is the problems that have plagued the market for sub-prime mortgages, which, although they have curtailed some types of lending for those with poor credit, have opened up a number of other lending options. A careful and patient bad credit mortgage shopper has a good chance of finding a lender that will offer a refinance or other mortgage with a reasonable payment plan and rate.
The five things you can do to help you qualify for that bad credit mortgage and save as much money as possible are to look closely at your credit report. Those who know they have bad credit often take the head in the sand type of attitude towards their credit report, not wanting to face the dreary news. What they don't realize is that as bad as the accurate credit news is, the report may be more dismal than it should actually be due to inaccuracies. Resolving these should be your first step before you start looking for a adverse credit mortgage.
Next, pay on every debt you can, without paying them off totally. For credit improvement, the suggestion of finance professionals is that you pay off 70 percent of everything before you pay off all of any.
If it is at all possible to raise your lines of credit prior to applying for a bad credit mortgage you would be wise to do so. This will improve your credit outlook to those potential lending institutions and decision makers.
If there is some reasonable explanation of what dire situation caused the havoc to your credit history - and there almost always is - sit down and write a carefully crafted letter about what happened. This letter is to tell your potential lender as well as the three major credit-reporting bureaus about your medical emergency, job loss, death of gainfully employed spouse, or other financial crisis that caused your credit problems. This is much better news to a creditor than a history of careless avoidance of bill paying.
A few months before you applying for your bad credit mortgage take as much money as you can and put it in a savings account, a money market account or a short term CD - anything that still leaves it relatively easy to access. Show that potential lender that you are trying to save and trying to improve your financial lot.
All these things can help you secure a bad credit mortgage and to pay a better rate than would be offered to you without these efforts.
