Good Credit vs Bad Credit Mortgage Loans |
If you have perfect credit with an excellent
credit rating, you’re very fortunate and will
likely get some good offers when you seek out a mortgage.
If you’ve had credit issues that negatively impacted
your credit rating, welcome to the real world. Even
those with the best of intentions can encounter bumps
along the road that wreak havoc on the credit score.
Whether you have good credit or your score is not so
good, here are some things you can expect from the process.
People with good credit ratings usually get better
offers when it comes to interest rates and loan terms.
That’s just a fact of life, but it doesn’t
mean there’s nothing you can do if you have less
than perfect credit. |
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Save |
| If you’re looking to buy a home but
your credit rating isn’t great, start saving as
early as you can. The more you can put down on a loan,
the more likely you are to get better terms, including
interest rates. In some cases, lenders who would have
denied your mortgage loan altogether may be more receptive
if you’ve proven your commitment to making the loan
happen by saving a significant down payment. |
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Take The Terms |
| If you’re really committed to getting
the loan, you may want to resign yourself to accepting
the terms being offered. After you’ve made your
payments on time every time for a year or two, the same
lender who was less than enthusiastic about this loan
may be more willing to make you a better deal. Remember
that this depends on your ability and willingness to make
the payments on time, indicating to the lender that you’re
committed to meeting the terms of the mortgage loan. |
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Shop |
| Remember that not all lenders are the same.
One of the big differences is that some lenders will focus
on different points of a credit rating. For example, some
lenders check the numbered credit score and care little
about the details of the credit report past that point.
Others will look more closely at the recent credit activity.
Even if your credit score is not good or you had credit
issues several years ago, you may find some lenders more
lenient if your recent credit actions were positive. |
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Negotiate |
| If you’ve found a lender who isn’t
offering the rates you want, ask what you need to do to
achieve those more favorable terms. You may find that
simply asking gets you something, but you’ll at
least know what’s important to this lender. It could
be that you’ll get better rates if you wait a few
months to take out a loan when you can put more money
toward the down payment. |
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Check your credit report |
Know what’s on your credit report
before you apply. That way, you’ll know what the
lender is going to see when he checks. You should also
be sure your credit report is correct. There’s
nothing worse than being offered poor terms because
of a mistake on your report.
With most lenders, you’ll get better rates and
terms if you have good credit. But don’t give
up on the idea of a mortgage loan just because you’ve
had some credit issues. |
