3 Tips to Get Mortgage Pre-Approval with Bad Credit
Getting pre-approved for financing can save you the stress and embarrassment of being denied a home loan. While pre-approval doesn't guarantee that your mortgage application will be approved, it provides you with an estimate of how much financing you'll be able to obtain. This can help you identify homes in your price range and give you an idea of how much home you can afford, based on your current finances.
The process for pre-approval is much like applying for the mortgage itself. You'll still need to meet the lender's borrowing standards and having a blemished credit history can negatively affect your ability to get approved. This doesn't mean that mortgage pre-approval with bad credit is impossible, however. Below are a few ways to make your loan application more attractive to banks, credit unions, and other financial institutions.
Improve Your Credit Score
The most important factor determining how much financing you can obtain -- or whether you can obtain any at all -- is your credit score. Before applying for mortgage pre-approval with bad credit, take some time to pay off any outstanding credit card accounts and defaulted loans. You'll also want to check the report carefully for any errors -- even a small piece of misreported information can have a significant impact on your credit score and affect your ability to obtain a mortgage pre-approval with bad credit.
Lower Your Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is another important factor when seeking mortgage pre-approval with bad credit. Before applying for mortgage pre-approval with bad credit, pay down your credit balances or consider consolidating then into a single, low-interest loan.
Save Up a Down Payment
Saving up a down payment shows lenders that you're financially responsible and, as such, are more likely to repay the full value of the mortgage. When you pay down a significant portion of the home's value up front, lenders consider you less of a risk and are more likely to approve your application for mortgage pre-approval with cad credit.
Having bad credit can make it difficult to obtain financing, but it's not impossible. Our lending specialists can help you secure the financing you need, regardless of your credit history. Contact us today to see your mortgage pre-approval with bad credit options.
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