The dream of becoming a homeowner does not have to be discarded just because your credit is not the best. There are lenders out there who are willing to work with people who have been through some difficult times and are now in the process of moving on from them. What you will need to do is focus on finding a lender who is willing to provide the financing necessary to buy a home. Here are some of the ways you can prepare yourself and eventually receiving the loan you need.
When was the last time you requested copies of your credit reports from Equifax, TransUnion, and Experian. If it’s been more than a year, now is the time to find out what’s in them. All three agencies provide free reports once every 12 months, so don’t waste time and money on services that will secure the reports while committing you to some sort of ongoing credit monitoring program.
Your goal is to make sure all the information on your reports is up to date. That means making sure creditors have reported that you have settled open balances, and that your payments over the last couple of years were on time.
You also want to determine if there are any entries or comments that do not relate to you. Errors do happen, and it’s possible for comments to end up on your reports when they actually apply to other people. If you see anything that is not correct, challenge the entries and seek to have the report data updated. Doing so could increase your credit score by a few points and broaden the range of lenders who provide home loans to people in your circumstances.
Even lenders who have programs for people with past credit issues want to make sure an approved bad credit mortgage in Mississauga has a high possibility of being repaid. Some of those lenders will place less emphasis on your credit score but still take a close look at the amount of money you owe versus your monthly income. The point is to make sure you can continue to honor your other obligations and still make your mortgage payment on time.
You can improve your changes by paying off some of your unsecured debt before applying for a bad credit mortgage. Fewer obligations to pay each month translates into more money that can go toward the mortgage. At the same time, paying off some of those credit card and similar debts will increase your credit score by a few points.
With your credit scores, banks and similar institutions are not likely to approve an application. Larger institutions normally have strict protocols they must follow. If you don’t meet one single requirement, the application is rejected immediately.
Non-traditional lenders, including those who offer private home loans in Mississauga, are generally more flexible. You may still need to explain some of the items on your credit report, but the the lender is more likely to consider you a reasonable risk. Remember that as your score increases, it may be possible to roll the initial mortgage into one with a lower interest rate in five to seven years.
Don’t give up on your dream of owning a home because of past credit issues. Do what you can to improve your financial position and find a lender who is willing to work with you. This time next year, you could be enjoying the sunset as you look out of the window in your own house.