Posted on: 14th Mar, 2013 02:05 am
It is possible to get a mortgage with bad credit? I can afford to pay around 50% down payment. The property will be a short sale condo or house around $50-60k. My credit score is 550ish... How can I get a mortgage? I make 38k a year.
Your credit score of 550 is too low to get approved for a mortgage loan. First, try to improve your score.
yes, you need to improve your credit score to qualify for a mortgage. In this case, you have to make timely payments, remove inaccuracies from your credit report, avoid making too many hard inquiries and so on.
Some of the ways you can improve on your credit score:Get a secured credit card. These cards come with a credit limit that's equal to the amount you deposit onto them. Also, make sure you pay all installment loans , like your car payments and student loans , on time, as each of these are reported to the credit bureaus.
It might be hard to get a regular mortgage, but since you can afford to pay around 50%, you might get a bad credit mortgage from lenders who offer sub-prime loans. Aside from the down payment, it might also be necessary to prepare collateral and a co-signer as some lenders will require them. Keep in mind though that sub-prime loans are expensive because of the high interest rates. If you can afford them, you can go right ahead and apply for one but if you are unsure, then it would be best to work on improving your score first.