Purchasing a new home after a recent or past foreclosure is easier than
you may think. Some previous homeowners are hesitant to apply for a
mortgage. Considering their history, many assume that mortgage lenders
will immediately deny their loan request. On the contrary, numerous
lenders offer mortgages and loans to individuals with damaged credit. Hence,
obtaining a new home loan is within your reach.
Ways to Quickly Improve Credit Score
After a foreclosure, rebuilding credit is a top concern. Obtaining a
mortgage loan and maintaining consistent payments will significantly
improve your score within a year. Even if you cannot negotiate a low
interest rate immediately following a foreclosure, by consistently making
on-time payments and proving your credit worthiness, you have the option
of refinancing in a couple of years for a low rate mortgage.
If you are hoping to obtain an initial low rate mortgage, make an
effort to improve your credit rating before applying for a home loan.
Applying for new credit accounts is a fast way to raise your credit score. If
possible, obtain a secured/unsecured credit card, department store
card, etc. For the next 12 months, make regular timely payments. Paying off
the balance each month proves you can handle credit responsibly. When
re-establishing credit, periodically check your credit score and report
for inaccuracies.
Picking the Right Lender
The lender chosen to finance your new home loan is important. When
searching for a mortgage lender, many homebuyers do not shop around.
Moreover, many do not consider secondary money sources such as mortgage
brokers or sub prime lenders.
If you have a past foreclosure or bad credit, you will not receive good
rates with traditional mortgage lenders. These lenders prefer prime
candidates. If your credit score is low, the likelihood of the loan
defaulting is high. Thus, bad credit applicants are charged excessive fees
and interest.
After a past foreclosure, contact an online mortgage broker. Brokers
are eager to help you acquire the best loan package. Moreover, the
process is very simple and quick. After submitting your income, employer, and
credit information to a mortgage broker, the broker will find
appropriate loan programs, and provide quotes from a variety of lenders. Upon
careful examination of quotes, you may either pick a lender or refuse the
offers.
Carrie Reeder offers advice and referrals for
Poor Credit Home Loans.
View all of our Recommended Bad Credit Lenders.
