Your dream of owning home seems far away. That’s because of some financial problems you had a few years back. Your score is improving, but most lenders take one look and reject your application. Before giving up, talk with a few lenders who specialize in loans for people with less than ideal credit. Here are some of the factors they will consider closely before a decision is made about your application.
Your Credit Score
These lenders are likely to examine your credit reports, but what they want to know is not summed up in your current score. To some degree, the score is taken into consideration. Of greater importance is what is found in the most recent comments submitted by your creditors.
This means those financial issues from a few years back will not automatically lead to a rejection. Assuming your current creditors are submitting positive comments to the credit agencies, bad credit lenders will continue to evaluate your application.
How Much Do You Make?
Income is certainly a factor that any lender offering a in Barrie will look at closely. Most have minimum income levels that all applicants must meet. The goal is to ensure there is enough money coming in each month to manage those loan payments. As long as your income is at least the minimum the lender requires, the evaluation process will continue.
The Current Amount You Owe
Information about the current balances you owe other creditors will also factor into the decision. Along with the total balances on those accounts, how much of your income goes to make at least the minimum payments each month? While lenders do want to help people buy homes, they also want to help people avoid overextending themselves financially.
If your debt to income ratio is within what the lender considers reasonable, you have taken one more step toward getting the home loan or mortgage you want. Should the lender have some reservations, you may get some advice about settling some of those debts and applying again in six months to a year.
Your Ability to Take On Another Debt
Expect the lender to ask for information directly related to your current debts. They already know that you are managing them well, based on the comments on your credit report. Now the goal is to
determine if your income level would allow you to continue paying those debts on time while also managing the mortgage loan.
Having the budget ready so you can demonstrate how you would manage the loan along with your other obligations is essential. Provided the lender is convinced that you can afford the loan payment, you are one stop closer to being approved.
While bad credit lenders do operate a little different from their traditional counterparts, there are still qualifications that all applicants must meet. Take the time today to learn more about the private home loans offers and what it would take to be approved. You may find that your situation will allow you to buy a home now and never have to pay rent again.