5 Buying a House via a Mortgage with Bad In the USA

Mortgage house
Mortgage house

Like most things in the modern world, getting a mortgage with bad credit is possible – at a price. You have to decide if the price is worth paying. Maybe the house is the house of your dreams and you just have to have it; it may be worth the price. Maybe the house may just be another place to live; then it may not be worth the price. It depends on your priorities and your place in life. All I can tell you is that it is possible.

Here’s how to do it:

First, find the house, Second, come up with a down payment. The bigger the down payment, the less you will have to pay in loan fees. The down payment should be at least 15 percent of the cost of the house. If you put down 20 percent, you will not be required to pay PMI (Private Mortgage Insurance) that, alone, could save you at least $200 on your monthly payment. If you can, try to raise at least 20 percent of the hose cost for the down payment.

Now you’re ready to buy the house.

If you have bad credit, your best option is to find a subprime mortgage lender. These non-traditional financial institutions specialize in finding mortgages for people with bad credit. The interest rate will probably be higher than what you expected – you have to decide if buying this particular house is worth the finance rate you will incur. Remember that it is possible to get lower rates if you shop around and compare prices. You just might get a great loan at a great interest rate. The right mortgage broker can be as good as gold. If he or she is really good, he or she just might be able to get you the deal of the century.

Third, have a steady job that pays well – most lenders like to see at least one year with the same employer. Lenders want to be assured that you will continue to pay them back. Steady employment often means that you are vested in your job. The longer you have been with your current employer, the better.

Fourth, bring your debt to income ratio down to 50 percent. That means you should be able to borrow as much as you owe (if not more). Another way of thinking about it is to add au your monthly debt payment. Is the total less than 50 percent of your income? If it is, your debt to income ratio is in good standing. If it’s higher, you are probably too much of a risk in today’s volatile market – you have over extended credit and adding to your debt could make it impossible for you to pay your debts back. Just a few things to explore when looking into a mortgage with bad credit.

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