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Are you having trouble getting a home loan because your credit rating is poor? It happens to many of us as it is simply so easy to get into too much debt – especially when young – and rack up late payments that affect your score. Here’s the thing though: you really want to buy that dream home and settle down, so what do you need to do? First, you need to set about repairing your credit rating, and then we suggest you talk to a lender and get pre-qualified for a home loan.
What do we mean by this? Before we talk about pre-qualification, let’s briefly at your options for repairing your credit.
How to Repair Bad Credit – Your Options
The length of time it will take to push your credit rating back to an acceptable level for home loans depends upon how bad it is right now. You can start by ensuring that you pay every bill on or ahead of time, including any loans you may have. If you do have a credit card, use it fairly regularly, but always pay the full amount by or before the due date. This way, the credit agencies will see that you are managing your credit successfully.
There is another option that may speed up the process of repairing your credit score, and it’s to pay a credit repair company to do it for you. These are legitimate financial support providers who will charge you a fee and help guide you through the best processes to repair credit. It’s worth you talking to one before you start so you can get an idea of how they can help you.
Why Get Pre-Qualified for a Home Loan?
Before we go on, we invite you to watch this YouTube video for more information. So, what is pre-qualification for a home loan, and why should you do it? Any home loan lender wants to know the situation that you are in financially. Quite simply, they want to be sure you can afford to repay what you borrow. Of course, they will have the house as security, but they really want to avoid that route if they can.
If you talk to a lender about pre-qualifying, they will want to know the following:
- How much you earn
- What your monthly outgoings are
- How much deposit you have?
- What other debts are you carrying?
- What your family status is
- What your credit status is
All of these will be used to assess how much you can repay and find a mortgage to suit for which you will be pre-qualified. The benefit of this is that you can then start searching for your dream home safe in the knowledge that, assuming you repair your poor credit sufficiently, you have only to talk to the lender again and they will begin the process of forwarding your home loan. We hope we’ve helped you understand what you need to do to buy that home you have always wanted.