Top 10 mortgages

As the old saying goes, there is no place like home, but millions of Americans with adverse credit scores believe that achieving the American dream of owning their own home may be out of their reach. With the turbulence of the housing market over the last ten years it isn’t far off the mark to assume that banks and other mortgage lenders have become a little bit tighter with their purse strings. But luckily there are options for those who may not have the best credit scores to obtain reasonable and even relatively cheap mortgages with a little bit of ingenuity.

Cash is King in Home Buying

If you are sitting on a large amount of cash, you could be have a good chance of securing a loan even if you have a fairly low credit score. If you are able to provide a substantial down payment on your prospective house, it will put you in a better position when it comes to obtaining cheap mortgages. While many think that banks have a set of hard and fast criteria for credit scores, the truth is that banks actually use credit scores as a type of risk assessment tool. If the bank sees that you have a low credit score they use that as guide to how likely you will be to make payments and ultimately pay off your home loan. By providing a larger cash down payment at the time of purchase it is a way of demonstrating to the bank that you indeed do have the capital required to make your payments in a prompt manner.

Ask a Friend or Family Member to be a Cosigner

Typically the industry standard credit score cutoff for receiving home loans is around 620. If you credit is at or below this line, it is no reason to fret. If you have a family member or friend that has better credit you can ask them to sign on as a cosigner for your mortgage. Many times, just by adding a cosigner you are able to a look lot more credit worthy in the eyes of lenders. However cosigning comes with a few caveats. Your cosigner is essentially seen as a silent partner to your loan,. This means that you as the primary signer are responsible making all the payments yourself. However your cosigner is responsible for if you stop making payments or default on the loan. Therefore, you want to make sure that you honor your cosigners act of good faith and always make your loan payments on time so you do not negatively affect their credit.


Don’t be Discouraged by No

Will it’s really easy to feel like buying a home is impossible after a string of nos from local mortgage lenders, don’t lose hope. There are several banks and direct mortgage lenders that specialize in fixed rate home loans for first time home buyers who are in the process of rebuilding their credit. The best advice is to do research, compare mortgage lenders and their home loan rates. While you may not always qualify for the cheap mortgages, hopefully you be able to find mortgage rates that fit your means.