digital divide network - article database

Credit scores can mean a lot of things nowadays. It could determine how likely you are to get that loan application, how likely you are to get approved for a credit extension, or how likely you are to get that job after the background check. Generally, people with impeccable credit reports always have an easy time. They get approved for loans easily, and they don’t get questioned when applying for utility services either. People with bad credit on the other hand usually have a tougher time. They will either be thoroughly questioned by credit evaluators, or denied of the loan application right away. Hence, most of the time, these people easily get discouraged when thinking about buying a house. But apparently, there is still hope.

Home Loans for Bad Credit

For most people, filing for bankruptcy and disclosing bad credit scores to lenders can be very humiliating. However, financial experts note that this may actually help loan applicants since they will more likely be compliant to the lender’s terms.

When it comes to bad credit home loans, it is important to consider how long the waiting period is between bankruptcy filings. Bad credit actually extends the waiting period between bankruptcy filings. The usual gap between bankruptcy filings is seven years. With bad credit score however, your credit report could stay for 10 years. For better home loan terms, the recommended waiting period is four years after filing for bankruptcy. FHA guidelines usually require 2 years after a foreclosure, which also means that you could qualify for a down payment that is as low as 3.5%. Hard money lenders on the other hand, will usually allow loans six months after bankruptcy filing or a foreclosure, and will require 20-35% down payment. Hence, when considering a bad credit home loan, it helps to know your options well, and determine with option will make it easier for you to repay your debt.

Improving your Qualifications for a Bad Credit Home Loan

Loans with bad credit are not rare nowadays. People are already able to buy cars through bad credit car loans despite their rather questionable credit histories. Home loans are not an exception. However, when talking about loans for bad credit, it still pays to improve our credit scores just so it will be easier for us to get approved. Here are a couple of tips on how you can improve your credit standing in order to win that home loan application :< BR>

1. Obtain a major credit card. Unlike what most people think, it will be easier to get one after bankruptcy for 3 reasons:
   
   
   • A bankruptcy filing gives you a fresh start
   • This means that you are currently clear from debts
   • You can’t file for another bankruptcy for another 7 years
     
     
2. Maintain a steady job for at least two years.
   
   
3. Earn a regular wage or salary. Self-employment, however, does not count.
   
   
4. Save for your down payment. Prepare at least 10% of the total cost.
   
   
5. Try your best not fall behind your payments. Always pay your dues on time.

Knowing about bad credit home loans would give a lot of people hope considering how hopeless one could feel while in bad credit standing. However, despite having this option, it is important to people to remember that maintaining a good credit score is always better, as it demonstrates more financial management capability and responsibility.

Amy is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on importance of identity monitor and tips on how to check credit score.