Unfortunately, not everybody is going to have a good credit score. This can happen for a variety of reasons, such as making late payments on a credit agreement. This can be a result of financial worries or you simply are not been organised enough and have forgotten to pay. No matter what the reason, each financial issue you have is going to become part of your credit history.
A lot of people start to worry when they are looking to get a mortgage for a new home and they have bad credit. Is it possible to still be granted a mortgage? Will you have to wait and improve your credit score first? Let’s take a closer look at the answers to these questions.
Can You Get a Mortgage with a Bad Credit Score?
The straightforward answer to this question might surprise you. It is still possible to get a mortgage when you have bad credit. This means that it is still possible to get the house you have always wanted. But, have to be prepared for some of the drawbacks that might accompany that offer.
For example, you might be given an offer for a mortgage but have to pay higher interest rates. Indeed, this is something that companies do because you are a higher risk of not paying back the mortgage agreement. So, it is a way for them to protect themselves. In addition, you may be asked to have a larger deposit for a home. This might be something that you are prepared to do. But, it can mean you have to save more money before you can purchase the property you want.
There is something called bad credit mortgages. This is just how it sounds and it is specially designed for people that want to buy a home but they have a bad credit score. Again, you are going to be expected to pay high interest rates and it can mean you have to pay up to 25 percent for a deposit. Depending on the company, you can also be limited on the amount of money you can borrow. The best thing you can do is work with a mortgage expert and seek advice.
Should I Improve My Credit Score First?
If you are worried about your credit score or you are not able to get the mortgage you really want, there are some things you can do. Namely, there are steps you can take to improve your credit score. It can take several years for your credit score to improve, but it is something that is possible to do. This can mean that you can receive a better mortgage offer in the future that is going to be best for your family.
There are a lot of things you can do to improve your credit score. First of all, you have to prioritise paying any credit agreements you have. Always ensure that you pay the credit repayments in full and on time. This is going to show that you are trustworthy and able to handle a mortgage. If you are having trouble for any reason, do not simply ignore the payment you have to make. Instead, contact the lender. Often, there are things they can do to help that is not going to damage your credit score.
one of the best things you can do is stop applying for credit for a while. Every new application you make is going to affect your score. In particular, applying for many at the same time is going to look like you really need cash. If you do have to make an application you want to spread them out. But, if you are serious about really boost your score for a mortgage, it is best to avoid new applications for a while.
You may see something about a credit repair company online. This is something you want to stay away from. Most of the time, you are paying for something you can do yourself. Alternatively, they might not be legal. Thus, they can look tempting but stay away from them.
Do not forget that when it comes to a mortgage, your partner’s credit score can help you out. So, if you do have a bad credit score, they might be able to even it out if they have a really good one. So, do not give up and assume that you are not going to be offered a mortgage. It might just look a little different than you thought it would.