Profile picture for shannalynn01

What is the best way to get a mortgage loan with bad credit?

We have bad credit and we are working towards improving it. Is there anything we should focus on more being we are looking to purchase a house?
  • December 08 2010 - US
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Answers (9)

Profile picture for shannalynn01
Along the lines of advice I have been given. Does anyone know of a lender that is great to work with in Minnesota to help me with this? Preferably the Southwest suburbs?
  • December 08 2010
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shannalynn01,
If you are wanting to buy in about a year, you need to work on your credit asap! It takes time to restore credit. There is a real science to restoring credit. The company I use has a great effect with my clients. Everybody is different though. I'm not sure this company will allow me to post their info here, but if you want it just drop me a line, and I will give you their number. They have awsome customer service, and will answer all your questions without obligation. All The Best! This is not my company, rather a service I use.
  • December 08 2010
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Profile picture for shannalynn01
Thank you everyone!!
I have already taken many of the steps you have outlined. I just wanted to make sure I was on the right track.
I am currently in a contract for deed that I regret getting into so come next November I have to be able to purchase the house or else I lose what I have into it.
Thanks again for all your advise!
  • December 08 2010
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Most lenders can refer you to a credit repair service. They should be able to develope a plan for you to follow.
  • December 08 2010
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Focus on establishing a new "good" credit profile for yourselves by using credit wisely, paying it on time and not over extending your credit.  I would also recommend increasing your savings/assets to give you an even better credit profile.

  • December 08 2010
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Profile picture for JenKOwen

Yes! Contact the financial institution that you think you will want a loan through.  Work on paying down the credit cards with the highest interest rates first.   Check your credit history to make sure the information is accurate.  See if you can take part in a first time home buyer class, while it may not help your credit it will give you additional information and help you keep your investment.  Also ask about first time home buyer programs such as Home $tart that match $3 for every $1 you save.  These programs can help you generate a larger down payment which will only help you!

Home $tart

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  • December 08 2010
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Profile picture for Steve Roake
A professional mortgage consultant will know how to help you improve your score and will work with you to get it to where it needs to be.  Typically, 620 is the score you're shooting for although debt to income ratios and income will also improve your ability to get a loan.  You'll also want to get a copy of your report and dispute any incorrect information.
  • December 08 2010
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Profile picture for shannalynn01

So it's best if we work with a lender now even though we will not be in a position to purchase for about a year?

  • December 08 2010
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Great question.
It's great you are working on getting your credit squared away; however, in doing this it is very important to be working with a financial professional.  Why?  A finance professional would be able to create a strategy for you to become efficiently and effectively financially fit to purchase a property.  Start by talking to lenders you would consider using to obtain a mortgage to finance your purchase.  Aside from focusing on your financial fitness also research your areas of interest so when it comes time to make the purchase you'll have confidence in what is available in those particular markets.
Happy to Help.  Aimee

  • December 08 2010
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