Not everyone is fortunate enough to go through life with consistently great credit. Many people go through periods when their scores are lower due to overextending themselves, dealing with a loss of income due to sickness, or experiencing life events that lead to bankruptcy.
While you’ve had your share of rough times, things are better now. What you’re not sure about is whether it’s possible to obtain a mortgage. With support from one of the Mortgagecwf.com brokers, there’s a good chance that you can secure financing. Here are some points to keep in mind as you compare different deals.
Do Expect the Interest Rate to Be Higher
Given the current state of your credit score, commanding the lowest interest rates will not be possible at this time. That doesn’t mean you have to settle for the first offer that comes your way. What it does mean is that most lenders will consider you to be a high risk candidate and attempt to minimize the risk by applying a higher rate.
Even so, some lenders will offer lower rates than others. While the interest rate is not the only point to consider, do look closely at the offers with lower rates. If it’s one you can live with, take it. After a few years of timely payments, there’s a good chance that you can refinance the mortgage and lock in a lower rate.
You May Need to Provide a Higher Deposit or Down Payment
Anything you can do to lower the amount that you need to borrow will increase the odds of securing the best financing. By providing a greater down payment or deposit on the property, you can lower the amount that you need. From the lender’s perspective, that also helps to lower the risk of doing business with you.
Why does this matter? If the amount you need to borrow is considerably less than the property’s current market value, the lender views the deal as being less risky. Even if you default on the mortgage, the lender is likely to recover the balance owed plus any other expenses. For your part, a higher down payment also means you can probably retire the debt faster.
Be Mindful of All Fees and Charges That Apply
Rest assured there will be some fees applied over the life of the mortgage. Understand what they are and when they will be applied. You want to know in advance that there will be a processing fee every time you remit a payment. It also helps to know the lender will charge a fee if you pay off the mortgage early. Being aware of the fees and how much they happen to be makes it easier to arrange your finances accordingly.
Choose a Lender Who Reports to the Major Credit Agencies
Before you accept any mortgage offer, confirm that the lender will report your activity to the major credit agencies. The goal is to ensure that every timely payment you make results in positive feed back to those agencies. Over time, those comments will help offset the older negative ones and increase your credit score. That will come in handy if you decide to refinance later on or should need some other type of loan in the future.
While it may not seem like it right now, there are a number ofmortgage options for bad credit that you need to explore. One of them may be exactly what’s needed to help you purchase a home and begin to mend your broken credit at the same time.