Financing a home with bad credit is a common problem for people. Over 25% of homes in US are financed through sub prime lenders, who offer financing to high-risk borrowers. While sub prime lenders charge higher rates and fees, through comparison shopping you can find a competitive financing offer.
Check Your History
Check your credit score to know what type of rates you can expect. If you have a score of 600 or lower, a down payment will be required between 5% and 20%. You should also check that information on your credit report is correct.
Place A Down Payment
The larger a down payment, better terms you can secure for financing your home. One of benefits of a down payment of 20% is that you do not have to pay PMI, saving most homeowners around a hundred a month.
Before you begin process of purchasing a home, pre-qualify for a mortgage loan. Determine ahead of time monthly payments you can afford, and then base your home purchase decision on that loan amount. You can also negotiate terms of your loans, especially with a down payment.
Lenders donít charge same rate, so it is best to compare rates and terms. Fees are one of hidden costs of loans, so be sure to add them into total price of loan when comparing prices.