Mortgages For People With Bad Credit Are Doable
Below is a MRR and PLR article in category Master Series -> subcategory Personal Finance.
Mortgages for People with Bad Credit: Yes, It's Possible
Securing a mortgage with bad credit is achievable if you follow some key strategies. While there's no magic trick, these practical tips can make a difference.
Find a Great Real Estate Deal
Begin by seeking out properties that offer good equity. A home with built-in equity can be just as valuable as a down payment, making lenders more inclined to finance it. Check with your preferred lender to see if the property's loan-to-value ratio can aid your application.
Reduce the Lender's Risk
Lenders are eager to lend but need assurance that their investment is safe. If the home you want is worth more than the loan amount, the lender faces less risk. For instance, purchasing a $100,000 house for $75,000 reduces their risk and makes your application more appealing. Always aim to lower their exposure to loss to improve your chances.
Consider a Seller-Carried Second Mortgage
Ask the seller to carry back a second mortgage. This agreement allows you to pay a portion of the purchase price directly to the seller, with interest. To make this option attractive, propose a contract that sets a balloon payment due in two years, giving you time to arrange refinancing.
A Business Approach
Remember, lenders aim to make money, so your task is to assure them of minimal risk. By demonstrating this, you'll be in a stronger position to secure a mortgage, even with bad credit.
Approach the process as a business transaction, and you'll increase your chances of success.
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