Poor credit can lead to having a hard time getting a mortgage, but having a hard time getting a good deal is not the same as being stuck to no-possibility-of-mortgage-zone! Truth is, having poor credit is more common than you think. People who are right out of college or have had a few months of financial difficulty usually have bad credit; but the same people can get the mortgage they need if they know where to look and how.
There are many lenders and firms that are willing to help people with bad credit score get a good mortgage. Sure, the terms may not be as attractive as the mortgages that people with impeccable credit can get, but they are out there, with just slightly different terms to help cover for the additional risks the lenders will take when dealing with people with a not-so-attractive credit score.
How do you find them? Well, you have to do your research; and also let go of some misconceptions that can prevent you from getting the mortgage you need. Avoid the faulty ways of thinking below!
Getting a Mortgage Will Destroy Your Life
People with a bad credit score tend to avoid getting a mortgage because they think that doing so will ruin them financially. Wrong! Something like this will only happen of you get a loan that you have no means of paying at all.
If you make sure that your mortgage’s terms are reasonable and that you are capable of paying your monthly obligation, there is nothing stopping you from getting a mortgage. In fact, if handled correctly, a mortgage can be your way to fix your damaged credit.
Having Bad Credit Means You’ve Got No Say in the Terms of Mortgage
So many people think that they will have no bargaining chips in negotiating their loan just because they got a bad credit record. This is, of course, a fallacy. Reputable mortgage firms will talk with you and help draft terms that you’ll be comfortable with. That’s what high-quality lenders do, keeping in mind that you bargain in a realistic manner.
If you can present your requests for a change in terms in a logical and mature way, there is huge chance that high-quality lenders would be willing to meet you halfway.
Bad Credit Means You Will Pay Heavily for the Mortgage
People who have this misconception often view a lender as someone who is giving them a favour, rather than someone who is providing them a service. Because of this erroneous way of thinking, they feel that they somehow ‘owe’ more than they actually do or planning to get.
High-quality lenders are not out to take you down. Their goal is to make business and keep you (the customer), happy. The tricky part here is in finding a high-quality lender with years or decades of great track record and avoiding ones that are out to exploit you.