Availing a Home loan with low fico score
Gone are the days when the banks simply said NO to anybody who showed a poor credit history. Banks are competing fiercely with one another for giving a mortgage to the borrower, but at the same time, it would be a lie if one said getting a home loan with a poor FICO score is easy. It is not simple, but fortunately,there are ways to get it, albeit by paying a slightly higher price. The monthly mortgage payments are definitely going to be high if your FICO score is not attractive to the lender. On the other hand, any score more than 600 is going to fetch an excellent deal for the borrower.
Make regular good income but have bad credit score?
One of the loan-related questions that many borrowers ask is that if they can get approved for a loan when they have a steady income but the credit rating is bad. Bad credit borrowers hope there will be a few lenders out there who will give away the home loan without looking too much into the credit. But that is not the case at all. Lenders take into account several factors before approval, and the credit rating happens to be the foremost factor. There is certainly no other factor as good as the credit history that speaks volumes about a person’s creditworthiness. Hence, it must come as no surprise that getting a mortgage with poor FICO score is tough. But the good news is that even if your score is bad, you could land a deal with the lender. The bad news is that the interest rate will be lifted up, considering the risk lender is facing with accepting a bad credit borrower.
Possibility of getting a loan after credit improvement:
Many might not like the idea of going through specific credit improvement steps and then getting a loan once their score has recorded a significant increase. But think of the amount of money you are going to save up through a low interest as compared to a beefed-up one. It is without a doubt worth every effort to invigorate your low credit worthiness.
Are you self-employed?
The most struggle while applying for a mortgage will be faced by people who are self-employed. Even if you show proof of consistent income to the lender, it is not going to be as easy as you might expect. In that case, be ready to pay a big amount of down payment.