Home Loans and Bad Credit
I need to buy a home, what if I have a good down payment but a low credit score?
When a lender is considering a possible client for a loan, it goes something like this: What is the credit score? What is the credit history? How much money do they have for a down payment?
Sure, a gigantically large deposit can help to cover a spotty payment history. However, you should be prepared for the absolute worst in fees and interest throughout the life of the loan.
In short there is no way around it. Even with a good deposit, you will need a supporting credit score and accompanying history to make home ownership a reality.
This was previously true before the credit crisis but now in the midst of many banks collapse, a sound credit score and report is more important than ever.
When someone asks about low scores and high down payments, I always want to know whether the client has done anything to try and improve their credit score. To the uninformed consumer your credit score can be a murky area.
With minimal effort you can request a copy of your report and see exactly what is on it. Often, costly errors are the cause of low credit scores. Having cash on hand gives you the power to negotiate and settle your old debts. When you settle your debts, negotiation that in exchange for you payment the bad credit will be removed from your credit report.
If you are not inclined to solve the errors by yourself, you might be wise to consider the help of a good credit attorney. For a surprisingly reasonable monthly fee and aggressive lawyer will tackle the problem of cleaning up your history and boosting your credit rating.
Another fallacy is that it takes to long to repair your credit. This couldn’t be farther from the truth!
It can take several months, to a year in the more severe cases, cleaning up a low credit score. Even in the worst cases of taking a year to turn yourself into a good credit risk you can save untold thousands in finance charges, fees and when you finance or borrow.
In conclusion, if you have a big deposit and a low credit score, good! Turn your situation from good to excellent by taking action today. The money you save will be your own!
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