If you already have a prospective home that you want to buy but not able to obtain a mortgage loan because of your bad credit, you should definitely read on. Applying for a bad credit mortgage or a subprime loan is an option for you. However, before you fill up that application, here are some actions you can do to turn the odds on your favor:
One of the first things you can do to improve your low credit score is to check the accuracy of your credit report. You can get a free copy of your credit report from either one of the major credit bureaus. See to it that every detail and every transaction listed on your credit report is true and accurate.
A single error reflected on your credit report can badly lower your credit rating and affect your credibility so if you see any mistakes, immediately inform the credit bureaus and ask that all inaccurate information be corrected. However, if you see that your low credit score is due to untimely payments and existing debts, then you should definitely do something about those credits. Do what you can to pay off those existing balances as soon as possible.
The truth is subprime lenders or bad credit mortgage lenders really do charge higher interest rates on their clients particularly because these people have a history of bad credit. All lenders need insurance that the borrowers they lend money to can pay and will pay them back on time. Thus, it can only be expected that lenders for people with a bad credit history will require higher rates of interest. This is why you should always look for Money Lender Singapore that are credible and officially licensed so that you get the best services. These money lenders would also give you a loan despite your bad credit scores which makes them more appealing and relevant than banks.
On this account, it would be up to you to wait and try to rebuild or improve your credit rating before applying for a home loan or if you want to settle for a bad credit home loan and face the consequence of a higher interest rate on your payments.
Credit home loan lenders generally require proof of income or existing assets before approving your application for a bad credit mortgage. Since you won’t be required to give a down payment for the home you’re trying to buy, lenders will still need to see that you have money reserves in your bank account that is enough to support you for at least 6 months.
Just like with a typical home loan, even if you’re applying for a bad credit mortgage, you still need to seek the right rates and charges. Different lenders vary in the interest rates they offer. Aside from interest rates, don’t forget to check the other fees you have to pay. Choose the most reasonable offer that will be easier on your budget. Online websites that provide quotes from various lenders will allow you to compare and have an idea about the true rates offered in the market.
Finally, remember to read the agreement you will signing-up and make sure that you understand every single term and condition that is noted on the contract.