Is Getting a Mortgage with Bad Credit Possible?

In the last few years, getting a mortgage with bad credit has become a little more difficult. A huge number of lending companies have gone out of business, which means your options are now a lot slimmer. This is all due to the recession and tough economic times that we find ourselves in.

At the end of the day, the foreclosure rate is currently extremely high, which means lenders are staying away from people they consider to be “high-risk” cases. With this in mind, if you have bad credit then securing a mortgage is not going to be a walk in the park.

Rewind a few years back and things were a lot different. There was many schemes that promised fast approval if you were looking for a mortgage, and the acceptance rate was ridiculously high. Basically, all you had to do was sign your name, and you could have a mortgage in minutes.

Of course, this kind of high-risk lending is one of the reasons why the economy is in such bad shape. Experts suggest that it will be a long time yet until we see a high acceptance rate on mortgages for people with bad credit.

Is there any hope?

In a word…yes.

Just because you have bad credit, that doesn’t mean it will be impossible to get a mortgage, it just means it might take you a little bit longer and it will also affect the terms of the mortgage.

One obvious way to make it easier to get accepted a mortgage loan is to do something about your current credit score and get it fixed.

Although you might find yourself in a position where it would take a very long time to bring your credit rating back to “excellent,” there are certain things you can do in the short-term to improve your score and gain a better chance of being accepted for a mortgage.

Check your credit report

Did you know that there may be items on your credit report which are false? This means you could be getting punished unfairly, and getting declined for a mortgage loan even though it isn’t your fault.

To make sure there are no issues with your credit report, you can request a copy free of a charge, or for a small fee in some cases, in order to have a closer look on what is included.

If something doesn’t seem right, then you can request to have it removed, and if successful, you should see an immediate improvement in your credit score.

Consolidation loan

Another reason for bad credit is because you might be deep in debt and struggling to keep up with repayments?

If this is the case, then a good option can be to consolidate your loans into one single loan. This can make your monthly repayments much easier, and reduces the chance of missing a payment, which means your credit score doesn’t take any further hits.