In today’s struggling economy, many people are losing their credit rating and finding they can’t buy anything, including a new home. While having poor credit shouldn’t be used against you when you are trying to procure home loans, everyone knows it is. There are even some government programs that exist to help people with poor credit get the home purchase loans they deserve. Below, you will find some tips on how to get the loan to buy your home.
Everyone has the right as a consumer to get a free copy of their credit report once a year. The first thing you will want to do when you decide to apply for home loans is obtain a copy of your credit report and dispute any charges you did not make. You can dispute any false information, and have it removed from your credit report. It will probably still affect your rating a little, but is a great way to start rebuilding your credit.
Submit all Important Information
Your poor credit may be the result of divorce, the death of a spouse, or any other disaster you can’t control; however, that will still stop you from getting home loans, or even home refinance loans if you already own your home. If you have since gotten your finances straightened out, you can get together all paperwork proving your new found finances and submit them to the lender. Sometimes, submitting this paperwork will help you to get the loan you need and may ensure you a low rate.
Get a Cosigner
One of the easiest ways to get a home loan is by getting a cosigner. It has to be someone who is a relative or a close friend and is financially stable with good credit. You do need to remember, if you default on the loan, the cosigner will be held responsible. You could end up ruining their credit and making your own rating worse, if you don’t act responsibly.
If you already have a home and are looking to refinance, then you might check into the HARP refinance loans available. The HARP, also known as the Home Affordable Refinance Program helps homeowners who are current on their mortgage and have no late payments during the last six months but actually owe more on their homes than the homes are worth. If you are looking to refinance for this reason, the HARP is a viable option for you.