Bad credit mortgages are often offered to people with low credit ratings due to a past bankruptcy, foreclosure, repossession, and so on. Bad credit usually means a more expensive mortgage rate and a narrowed selection of lenders. But there are still lots of choices – so even if you have bad credit, you can still take out a home loan.What is a Mortgage Broker?If you have bad credit, enlist the help of a mortgage broker. Brokers facilitate choosing the correct mortgage. Doing it on your own is time-consuming: you must contact lenders and find out all about their lending requirements. Most traditional banks and credit unions won’t even consider individuals with bad credit, because they want borrowers with big down payments and high credit ratings.Better than doing all the legwork yourself, get in touch with a broker after you’ve decided to purchase a house. Mortgage brokers are already in touch with lots of money lenders, including those that specialize in sub-prime and bad credit mortgages. This enables the broker to quickly introduce home buyers to all their options.How to Apply for Mortgage LoansMortgage brokers do business both locally and online. Both types of brokers have access to a large pool of potential lenders for mortgage loans, and applying over the Internet is faster and more convenient.Internet brokers should give you a mortgage quote with no strings attached: that is, you are not obligated to do business with them just because they gave you a quote. The mortgage broker will then take your financial information and use it to calculate the types of mortgages you can qualify for under various lenders. Most home buyers will find that they get quotes from about three lenders.Take Action to Get Better Interest RatesSadly you can’t qualify for the best interest rates if your credit is poor. But there are methods for improving your likelihood of getting the best rate possible for you. Starting a minimum of one year before you plan to apply for a mortgage, do your best to boost your credit score as much as possible.Simple steps like paying bills on schedule and paying down debt will help your credit immensely. Other than that, you can keep your lines of credit opened, don’t ask around for any additional credit, and stop carrying a balance on high interest cards.
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