Sharing is caring!
So, you have a low credit score and you are wondering how to fulfill your dream of homeownership as lenders may not be ready to approve your home loan application. Well, getting a home loan application with a low credit score can be difficult but not impossible, especially nowadays.
Why? Because there are low credit score mortgage lenders in Houston, TX, who offer loan approval despite a low credit score. But you need to focus on a few important things, including –
Show records of timely repayments on existing bills
Your three-digit CIBIL score depends on the timely repayments of your existing debts. In case, you have defaulted earlier on any loan or EMI payment, your credit score will take a hit. So, before you apply for a home loan program, make sure that you have a record of timely payments on all of your outstanding debts, such as your credit cards, loan EMIs, as well as utility bills. It will help you build a higher credit score and improve your chances of being approved.
Current evidence of income to support loan repayment ability
Most lenders consider other factors, including your current salary or income sources, along with your credit score. In case, you have a low credit rating, you can still provide a bank statement with evidence of a hike in your salary, annual bonus, or other additional income sources. It proves that you are financially secure enough to repay the loan on time – it will help you get approval faster.
Resolve errors in your credit report
Often, there are genuine cases when there have been errors or misreporting on your credit report. Check your CIBIL score once in 6 months to make sure that such errors are not happening and your credit report is updated. Your credit score can be low even when you are a victim of fraud. Take some immediate measure to report the fraud or crime, so that it does not affect your CIBIL ratings.
Save for down payment
When your credit score is low, you can take steps to improve it. And along with this, you should take steps to come with a decent down payment – the initial payment that you need to make to the lender. Buyers with low credit scores can get approval with a high down payment. It is because, with a high down payment, they need to borrow less. So, borrowers can get easy approval. Before you apply for a low credit home loan, you should try to save as much as possible or opt for down payment assistance programs to ensure approval.
Shop for lenders
As there is no fixed credit requirement, it varies from a lender to another one. While one asks for a high credit score, another one may be ready to offer you the approval with a low credit score. So, you should show for lenders. And if you want to make the process easy and hassle-free, then you can ask for quotes from different online, compare them and then opt for the one who is asking for the lowest quote. So, showing records of timely repayments, coming with the current evidence of income, resolving errors in the credit reports, saving a lot for the down payment, and shopping for lenders are some of the crucial things that help you get a home loan approval with a low credit score from lenders. So, hurry up and apply.