Published On: Fri, Sep 6th, 2019

How to Get a Low Credit Score Mortgage

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A low credit score mortgage is specifically designed to help someone with an adverse credit history to buy or refinance a house. Whilst there is little doubt that it is easier to borrower money with a high credit score, receiving approval for a mortgage with bad credit isn’t an insurmountable obstacle. It is important to appreciate that the cost of borrowing will be higher. However, subject to the tie-in period, it may be possible to refinance in order to secure a more favorable rate of interest.

Approval for a Low Credit Score Mortgage

A mortgage for poor credit can be achieved, but the lending criteria are more stringent in order to offset the likelihood of the borrower defaulting. A bad credit mortgage lender will seek to protect its legitimate business interests by ensuring that the repayments are affordable to the customer and that they will be able to recover their money should the borrower default on the arrangement.

Poor Credit Mortgage Lenders Expect a Stable Employment History

The longer the applicant has been in the same job, the more likely they are to get an adverse credit mortgage loan approved. Lenders will not look kindly on those who are in temporary employment or are still in their probationary period. The other thing that the lender will check is the borrower’s income to debt ratio. A high percentage of income consumed by the repayment of debt increases the likelihood of default. Personal debt needs to be kept to an absolute minimum.

low credit score mortgage

Provide a Sufficient House Deposit

The higher the deposit, the greater the likelihood of receiving approval for a low credit score mortgage. Most banks will want to see how committed the customer is to the home buying process and will gauge this by specifying a 75% LTV. Whilst this protects the borrower in the event of negative equity, the reason banks seek this level of contribution from a homeowner is because it means that they can recover their money in the event of mortgage repossession.

Mortgage with Bad Credit Applications

A careful assessment of the lending criteria is fundamentally important because there is no point in applying for credit when acceptance is unlikely. Making unnecessary credit applications will seriously reduce the likelihood of an adverse credit mortgage loan being approved. This is because it gives poor credit mortgage lenders the impression that the borrower is desperate and likely to default. Each credit search will show on a personal credit report for a period of not less than 12 months.

About the Author

- I am an internet marketing expert with an experience of 8 years.My hobbies are SEO,Content services and reading ebooks.I am founder of SRJ News andTech Preview.

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