When you decide to buy a house or get a mortgage, you think about your credit score because your credit score plays a significant role in the type of mortgage you’re going to get and what kind of rate you will get in terms.

Mortgages for bad credit

A credit Score is significant and critical to your financial well-being and wealth creation. You will be surprised that most people learn about managing their credit history by hardly learning from their past, silly, careless and avoidable mistakes. At some point in life, we all make mistakes sometimes; situations are beyond our control, even with the best of our intentions. We become helpless, and things go out of hand. Well, it isn’t the end of the world that happened then, and this is now. The most important thing here is that you’ve decided to take charge and mend the whole situation; this was the most crucial step in reversing this real lousy credit scenario.

Another essential thing to understand here is no matter what your credit score is right now; it may be in six hundred, five hundred or even high 400s; keep in mind the more you delay this decision and take action, the more you are slowing the credit recovery process and the longer it is going to take for you to get into your dream home. Since you’re reading this article, I take it that you’ve already taken the decision to start planning for getting a mortgage.

How to apply for a mortgage

Now the second step would be to start asking your family, your friends your colleagues for a good referral of a mortgage agent who can be working with any mortgage broker or even a more mobile mortgage advisor at your local bank branch. I personally always advise to go with the one whom your friends or family might have referred this way, you can know how they have performed earlier, what kind of contacts they had with the lenders, what sort of timelines or deadlines they worked with, what exceptions they were able to get from each lender and once you’ve shortlisted the agent you want to work with, be completely transparent with them; Explain them in great detail what happened, why it happened and how your credit score plummeted and now you are committed to improving your score and eventually getting into your dream house.

The Beacon credit score of 600 plus, but there are a lot of lenders who are willing to make exceptions because they also understand the situations that happen in life with the right kind of explanations and considering various other factors you still stand a good chance in a nutshell lender are going to look at your whole financial picture your annual income stability of your job your previous financial habits saving patterns spending patterns how consistent is your professional growth all are going to be studied in great details your credit score is a big piece of the puzzle, but it’s not the whole puzzle itself to explain further. Suppose someone has a beacon credit score of 750 but doesn’t have a consistent source of income or doesn’t have a permanent job also won’t quickly easily qualify for a mortgage, so you can see in any case the whole financial picture is going to be the determining factor now in this scenario an essential action step, which you can take is getting a cosigner. This is one of those situations where the importance of partnering can be more crucial getting a cosigner is like strengthening the deal giving additional support to the deal for making the lender more comfortable getting the confidence of the lender providing the assurance that even though your credit score is bad, but a such-and-such family member or a friend who is with an excellent credit is my site they stand with me to steer me out of these murky waters it’s like compensating for your bad credit he is also equally responsible for the deal reach out to your family friends extended family even co-workers or associates whom you might be very very close for co-signing the deal with you explained to them that your loss credit score will not impact them, but you are going to be immensely benefited by bringing them on board of course once your credit score has started improving and it’s back to normal where it should be.

Then your agent in talk to the lender in helping remove the cosigner from the title; that’s the easy part.

Another step that you can make towards getting a mortgage with bad credit is putting in more down payment. Once you increase the percentage of your down payment towards the house, your lender will have more confidence in you the more skin you have in the game, the more comfortable you will lend against the size of your down payment will demonstrate that now you have more at stake more to lose and now you are more committed and genuine rather than borrowing some maximum of somebody else’s money you are participating more in the whole equation not only this will help you in getting the mortgage but will also contribute in getting better mortgage rates better terms. Again once your mortgage agent knows about the size of your downpayment, they can negotiate better with the lenders who are willing to be more accommodating to get your business and bring you on board.

Buying a house with bad credit

We all want that dream home two bedrooms, three bedrooms, double door garage, detached house in an upmarket neighbourhood, hardwood floors, spacious backyard for those family barbecues. I suggest downsize isn’t it wise that instead of getting into an ideal house go for a home instead of in place of three-bedroom go for two bedrooms in area of a detached house go for a townhouse at the moment your credit score is not so great but it’s not going to remain like this forever you’ve already started to take the necessary steps to reverse it for the sake of understanding as your income is 100,000 and you’re eligible for a 500,000 mortgage but instead of utilizing your full eligibility you downsize and get the house for 400,000 since you have downsized and minimize the risk which your lender is going to take on you this will improve your chances of getting your mortgage approved but also again.

Better terms better rates, on the other hand, this will also give you the window to save more this way eventually once everything starts stabilizing and your credit score starts it upward accent you can pay off your debt faster or even start thinking about of about the next logical step which is planning about your next real estate.

Conclusion:

1- Don’t get caught up in the cycle of oh, my credit score has fallen now no lender or bank will deal with me reach outreach out to a mortgage professional and tell them your situation honestly in great details

2- Get a cosigner. It’s easy to get them off the title later, but for now, don’t contemplate more on this lovely plan for an extra downpayment and just one more downsize. With all that said, reach out to your family and friends, and your loved ones ask them to be a cosigner with you; ask them for a reference for a good mortgage agent or a mobile mortgage advisor who can advise you and help you navigate, please tell them your whole situation honestly frankly that value is into the problem of low credit score what impacted it, and the professional can suggest you the necessary steps which you can take in your particular situation to get to the minimum threshold of credit score which is required for your mortgage a lot of lenders are willing to work with lower credit score they are there to help you get into your home you might not be in a perfect spot to get the mortgage right away, but with the proper steps your own future home is certainly not that far away.

If you need any further advice or assistance and please don’t hesitate to shoot me a text or an email or give me a call at 416-312-3546. I look forward to hearing from you.