Home Purchase – First Step Mortgage Loan

Home purchase was Katie’s first wish. But, her bad credit scores pulled her back every time she thought of consulting her financial advisor. However, this time, she was determined to gain knowledge about bad credit home loan. During Katie’s consultation session with her advisor, many of her myths were busted. At the end of the session, she had an image of her dream home as clear as a crystal in her mind! Let’s have a look at the myths that hover over the minds of people like Katie, preventing them from enhancing their life’s happiness through home purchase. Myth #1: Bad Credit Holders Pay Extremely High Rates The truth is that if you have a poor credit score, you will have to pay rates on loans that are only a couple or more points higher than the regular loans. It’s absolutely not an exorbitant amount, as many presume it to be. The fear of high rates is probably one of the major reasons of avoiding home purchase by bad credit holders. Myth #2: Bankruptcy Indicates Bad Credit For Many Years. This is false. If a person goes bankrupt or makes late payment, it doesn’t mean he or she will live with a bad credit score for as long as a decade. Yes, it’s true that your bankruptcy gets scribbled in to your credit report. But, it does not mean you cannot have a good credit after this.

Home Purchase Depends On Credit Rating

If you are not sure of your credit rating, get a copy of your credit report from one of the major credit bureaus. You can even buy your credit rating information or get it from a credit monitoring service for free. Whether you are bankrupt or not, you should keep yourself updated in terms of your credit ratings. Besides, you should check your report regularly for any errors. In case you find any error, immediately inform the credit bureau and have it corrected. This would influence your future financial transactions, including applying for home purchase loan. This is not the case. Your credit rating is NOT the only factor that affects your home purchase agreement. There are also other things to look out for such as your assets, employment history, and cash reserves. If you possess six months cash reserves in the form of CODs, savings, or money market accounts, you become eligible for getting home purchase loan at better rates. Besides the above mentioned factors, down payment too, influences your loan rates for home purchase. The higher the down payment, the better your loan rates for bad credit home loan.

Home Purchase For Bad Credit Holders

Absolutely wrong! In fact, it’s the opposite. When you opt for home purchase by taking a loan, you open the doors for improving your credit score. Pay the loan in time; make all the monthly payments regularly and get rid of short term debts. Do this and watch your credit score rise! Another good thing is that once you enter into a mortgage agreement, you can go for refinancing within two years at better rates! Who says only good credit holders can take loans and fulfill their dreams of home purchase? It’s time bad credit holders took control of their finances and shed their despondency. A large number of financial tools are tilted in the favor of bad credit scorers. There are many new ones being introduced, especially for such people. Now, it’s their turn to hold their dreams and make them true!