Applying for Mortgage Loan with Bad Credit

Getting yourself on the property ladder is an exciting process, but applying for a mortgage loan can often turn into a daunting task if you have a poor credit history as you may find that lenders are less inclined to help you out when securing a mortgage loan.

That doesn't mean you've reached the end of the road, as today we are going to be talking you through a couple of tips when it comes to managing your expectations and even improving your credit score to help you fly the nest.

We are also going to be providing you with a few of the best-rated Mortgage Loan providers available for those whose credit score is a little lower than desired, so sit back as we jump right into the article.

Securing a Mortgage Loan

We understand that securing a mortgage is easily one of the most daunting tasks you will have to undertake during your adult life, as it requires some serious conversations about your financial state and taking out a loan agreement that you are legally tied to.

If during your conversations about your financial state it becomes apparent that your credit score is much lower than expected and banks and loan providers are reluctant to go into agreement with you for a property, there are a number of ways in which you can manage this to ensure that you still have the option to take out a mortgage one way or another.

1. Do the maths
Before applying for a mortgage loan, it is important to assess your current financial situation to map out the type of loan you may be entitled to.

By taking into account your yearly household income, alongside your expenditures, you will be able to obtain a clearer picture of how much you may be able to borrow, and ways that you may need to alter your spending habits to ensure that you are saving money in the correct way.

It is important to be realistic about the amount of money you are wanting to borrow from your mortgage loan provider, so be sure not to be too ambitious as this could end up working against you as the lenders will see you as less likely to be able to repay their loan.

2. Improve your credit score
If as discussed, your credit score is lower than desirable, do not panic as there are some simple yet very effective ways in which you set out to improve it so that you are more likely to be able to obtain a loan.

Firstly request a copy of your credit history, as this will allow you to track and assess your current credit situation and areas where you might be negatively affecting your credit.

A few quick and simple ways to improve your credit score is to ensure that you are meeting your repayments on the likes of credit cards in a timely manner, as late payments can have a detrimental effect on your FICO score.

3. See if you can borrow elsewhere
If your credit score is on the lower side, it may be worth discussing with friends or family members to see if they could lend you a little extra cash which will allow you to pay off debts such as credit cards and improve your credit score.

Although this will mean that you are now in debt to them, there is less chance of you having to stick to strict repayment plans and interest rates, meaning you, in turn, will look more desirable to mortgage lenders in the future when you call upon them for assistance in purchasing a property.

4. Do your research
Whilst having a low credit score may seem like it will affect your chances of obtaining a mortgage loan, there are a number of providers that are willing to overlook this and take into account other factors such as testimonies from landlords that vouch for you paying your rent on time, and other similar references of good character and money sensibility.

If you're looking for a more in-depth look at mortgage providers, then check out this helpful article on bad credit mortgage lenders at Crediful. We've mapped out just a few of the providers that may be willing to make you an offer regardless of your credit score, whilst still providing you with a reliable and trustworthy service.

Summary

After all of the above advice, the best thing we can recommend to do is pull the bandaid off and visit a mortgage advisor, as they will be able to give you some advice as to where you are financially and how you can improve so that you can get yourself on the property ladder as soon as possible.

Alongside this, we hope that we have been able to provide you with a few tips and ways that you can put your mind at ease when it comes to a low credit score and obtaining a mortgage.

If you yourself have been in a similar situation, and have any advice that you are willing to share that you feel may help others out, be sure to leave some comments down below and share this article with your friends and family!