Income is everything, it is not only the base of your day-to-day life but also of coming tomorrow. From saving goals to buying a big house, all targets encapsulate in that one income that in spite of its ‘not so big’ size tries to fulfil all your desires. Oh, yes buying a house, which is a big decision and a big adjustment for your earnings. But there is one more factor that has its unavoidable interference in this matter. Yes, the credit score. If it is excellent or good, you can stay sure about a smooth borrowing journey. The concern is obvious to arise when you have a bad credit score. L
The need is to change the approach, as in the case of less-than-perfect credit rating, things do not work according to the normal procedure. Both the lender and you have to work on the most effective solution to find a way out.
BUT BEFORE THAT…..
Firstly, try to attain some improvement in credit rating before applying
Why not play safe and do something that can increase your chances of approval? There are some ways that can bring some betterment in your credit file. Before approaching to the lender for a mortgage, try the following tips and attain an upgrade in your credit score.
Check the credit file for any mistakes – Did you know that sometimes mistakes happen in the credit file too? Even if you have mentioned the wrong spelling of your name or address of your house, it can really badly affect your credit file. This leaves a potential impact on your credit score. Check your credit file and keep doing this in every 3 months, in fact make it a habit. Check to make sure that there are no mistakes. If there are any then get them rectified or removed.
Close the unused credit cards, bank account, store cards etc. – The financial commitments in your name whether they are in use or not, show in your financial records. They consume considerable space in your creditworthiness. If you have stopped using any of such financial service or product then close it as soon as possible. This to bring a boost in credit rating.
Say good-bye to financial commitments with the ex-partner – If you have taken divorce from your partner then quit from all the joint financial commitments. The financial behaviour of your ex-partner can affect your credit rating. For instance, a joint bank account in which he/she does not maintain the minimum balance requirement can affect your financial records.
There are many more ways, which suit to individual situations. It is better to take help from a financial adviser.
– NOW COME TO THE POINT
Once you get a little improvement in credit rating, the time comes to find the answer to ‘How to Get A Mortgage With Bad Credit But Good Income’.
Search for a lender that provides mortgage with bad credit
Nowadays due to the trend of online lending, a new and liberal approach has come into the picture. The lending companies (online) such as shinemortgages.co.uk provide even big amount of loans beyond credit score status on certain conditions. If you can fulfil them, the approval message can come in your favour. For that, it is necessary to precisely find the lending companies that provide mortgage with poor credit rating.
Gather all the details that can prove your repayment capacity
This is the answer if you have doubt on how one can get the funds despite the bad credit. The lender needs to know if you can repay the borrowed amount or not. Income, additional income from a part-time job, rental income, whatever you have to show in the name of income, do not miss to show it. Those with good income easily get approval USUALLY.
The income-outgoing ratio should be balanced
Yes, the good income can bring easy approval but if a huge part of it goes in expenses then even the big earnings may become useless. Take care of this fact and at least 6 months before applying for the mortgage; show a good income and outgoing balance.
Deposit – Oh, this one is most important
Big deposits nullify most of the problems. It has two benefits –
- You need to take a small loan amount for which it becomes easy to qualify as the obligation does not remain big.
- The lender can trust your creditworthiness as there is less or no gap between the property price and the loan amount.
As your credit rating is not up to the mark, it is advisable in fact required to do a big deposit. It can ease the stress on the doubt that you will get the loan approval or not. When the lender notices your good capacity to provide a big part of the property price in advance, it becomes easy to give a ‘yes’ on loan application.
Conclusion
The process to get a mortgage takes time for a bad credit scorer. However, good income and efforts in the right direction can turn impossible into possible. Do the due and get closer to your ‘home dream home’.
