If you are in the sub prime category online lenders can save you a lot of time. Even with the recent "scandal" of sub prime lenders, there will always be a sub prime market. Here are some steps you can take to become a homeowner with bad credit.
* KNOW WHERE YOU STAND It is this simple: the higher your FICO score the better the deals will be. Get a copy of your report, fix any errors and take steps to improve your score. If you are below 500 you are going to have a hard time getting a loan. If you are in the 550-650 range you should be able to get a loan with a down payment. If you are in the 650 range you should be able to get 100% financing. Just bear in mind that things have severely changed in the last 6 months.
* START SHOPPING Online lenders can save you lots of time and frustration. Look for sub prime lenders-lenders that specialize in loans for borrowers with bad credit. Apply with several of them, but thru a service like "Guide to Lenders" that way your credit report will only be pulled once.
* SAVE FOR A DOWN PAYMENT As we have shown if you don't have a great credit rating cash will help you big time. The more your financial commitment to the deal the better your chances of getting favorable rates and terms.
* DON'T GIVE UP Someone out there has a loan with your name on it-you just have to find it. Don't take no for an answer.
* NOTHING LASTS FOREVER If you find a loan with rates and terms not to your liking you may want to take it and refinance in a few years when your score has improved.
Use the experience to grow and improve your score and you will be the winner. A bad credit rating should only slow you down not stop you from getting a mortgage. On line lenders will save you time and frustration and help you achieve your goal of home ownership.
Jack Krohn is a leading free lance writer on Home Equity and Mortgage issues with over 35 articles to his credit. He is also the #1 author of Home Security Articles in the country according to Ezine Articles.
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