You want to buy a home but have a bad credit history? Don't lose hope! There is still some hope left. You can easily find bad credit home loans to realize your dream. Though, it is true that finding bad credit home loans is difficult but not impossible. Little care and preparations can help you grab the best deal. Read below to find out tips to get easy home loans in spite of bad credit history.
1. Know your credit score: Before you apply for the home loans it is best to know your exact credit score. Your home loan and rate of interest fairly depends on the credit score. Contact the three credit reporting agencies and request for the credit reports.
2. Find ways to improve credit score: It is very important to look out for effective ways to improve bad credit score. If you can try and clear-up your credit score the lenders will take you seriously and offer you discounted interest rates.
3. Find out different loan plans: Try and gather information about various types of this programs available. Learn about the pros and cons of each type of this scheme. Search on internet for different plans, interest rate and features and then make a careful price comparison. Check on Internet to find the best interest rates.
4. Involve an expert: It is best to seek guidance from experts. A mortgage brokers have contacts with potential lenders which help you find loans easily. Prefer the broker that is well qualified, have contacts and reputed. You can find the brokers online but before you engage them check for their reputation online.
5. Save for the down payment: To lower down your interest rate it is best to save for the down payment. Even if you are able to put down around 3-5% your interest rates will lower down considerably. You can even seek help from the down-payment assistance program.
6. Shop around: When looking out for bad credit home loans it is best to shop around a little. Carefully study all the offers and then make comparative analysis. There are many ARM (adjustable rate mortgage) and FRM (Fixed rate mortgage) mortgage plans to choose from.
7. Check for the pre-payment penalties: Pre-payment penalty is a contract between lender and borrower that states the pre-payment penalties elaborately.
8. Rebuild the credit score: To improve your credit score it is best to make timely monthly payments. This will help you rebuild your credit score without much of troubles and win the benefits of good credit score in times to come.
9. Refinance the loan: After you have improved your credit score after paying timely premiums monthly you can get the loan refinanced after two years or so at lower rate of interests. But watch out for pre-payment penalties.
These 9 tips will surely help you have the bad credit home loans without having to run from post to pillar.
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