| Qualifying for a home loan with poor credit used to | | | | written explanation. This provision accommodates |
| create a difficult situation for home buyers. Even today, | | | | home buyers with a previous history of good credit. |
| some lenders will not consider an applicant with a | | | | Acceptable reasons might include employment loss, |
| credit score less than 650. As a group, the majority of | | | | temporary disability, serious illness, etc. Written |
| mortgage lenders are adaptable. For example, in more | | | | explanations must be accompanied with sufficient |
| recent years, FHA guidelines have become less rigid, | | | | evidence (medical bills, unemployment pays stubs, etc). |
| wherein bad credit applicants have a better chance of | | | | 3. Research Mortgage Loan Requirements |
| getting a loan approval. | | | | Several months before buying a home, bad credit |
| If you have bad credit, plenty of things can multiply | | | | applicants should contact multiple lenders and inquire |
| your chances of approval. Apparent solutions include | | | | about mortgage requirements. Credit score minimums |
| paying bills, collection accounts, charge-offs, and debt | | | | vary according to loan program. For instance, some |
| reduction. Then again, home buyers can also do | | | | financial institutions will categorize an applicant as sub |
| research and learn explicit steps that can accelerate | | | | prime if their credit score is less than 650. |
| the process. | | | | 4. Meet with a Financial Consultant |
| 1. Select a Good Home Loan Program | | | | Nearly all bad credit is attributed to poor money |
| Fannie Mae's "Timely Payment Rewards" Loan is | | | | management. Prior to submitting a loan application, |
| perfect for home buyers with poor credit. This loan | | | | briefly meet with an expert. After reviewing your |
| program is purposed for people with past or current | | | | assets, credit, and debts, a financial consultant can |
| credit problems. Initially, the home loan rate is high. | | | | offer insightful advice, and create a plan that will help |
| However, if the borrower makes timely payments for | | | | you improve your credit and purchase a home. |
| 24 consecutive months without a delinquency, they | | | | 5. Don't Defer Credit Improvements |
| qualify for a 1% rate reduction. | | | | Even if you take measures to better your credit (pay |
| 2. Explain Credit Situation | | | | off debts, correct credit inaccuracies, etc), it can take |
| If uncontrollable circumstances contributed to bad | | | | up to 45 days for changes to show on your report |
| credit, some mortgage lenders will acknowledge a | | | | credit. |