How to get approved when applying for mortgage loans with bad credit?

People with bad credit record feel that there is a slim possibility for their loan to get approved. Well, your credit rating does matter when applying for mortgage loans. Ideally, you should have a stellar credit score for your loan to push through. If you got a poor credit record, then don’t lose hope for you can still apply for a mortgage loan and have it approved by the lender. You just have to prove to the lender that you are capable of repaying the loan on time.

Debt to income ratio

Lenders do not only check the credit report but as well as your debt to income ratio. Many lenders require that not more than 40% of your current income should be assigned for debt repayment. If you are earning $20,000 a month, $8,000 should be used to pay the existing debt. Even those people with excellent credit rating can be turned down by the lender if they do not have a good debt to income ratio.

Prove to the lender that you are now capable of repaying the loan

There are many reasons why you get a bad credit rating. It could be that you are delinquent with your credit card payment, not being able to pay the loan on time, and the likes. It is true that it is easy to ruin a credit record but extremely difficult to repair, but the thing is, it can be repaired. It’s just that there are circumstances that lead you to be delayed with your payment such as unemployment, hospitalization, and so much more. Prove to the lender that you are now back on your feet and are willing to do everything to prove to them that you are now good in repaying the loan.

Apply for a small loan

If you have a poor credit score, it will be easier for you to get approved if you request a small loan. Do not immediately jump to big loans as you will surely have a hard time be approved. Apply for a small loan, pay on time and improve your credit before taking out large ones.

Applying for a mortgage loan with bad credit is harder than those with excellent credit record. The good thing is that it is still possible, and you just need to search around and look for deals. The Freedom Mortgage Corporation is one of the highly trusted lending companies today. It offers different types of mortgage loans for people from all walks of life. Click on this link https://www.linkedin.com/company/freedom-mortgage to know more about the company and the services it offers.

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