Tips On How To Get A Mortgage With Bad Credit But Good Income

If you are someone that has bad credit, you will not necessarily face a loan rejection when applying for a mortgage. This is especially true if you are someone that has bad credit but good income. However, because higher credit will lead to lower interest rates, you will end up having to pay much higher interest rates to get one. Also, you will need to properly explain why you have bad credit, to begin with.

How To Get A Mortgage With Bad Credit But Good Income:

One of the biggest things that you can do if you are someone that has bad credit but a great income would be to consider making a much larger down payment. This way, you will not have to fork over a tremendous amount of money in high-interest rates. Because you will be placing more money into the property, it is going to make you much less risky to a lender. Therefore, it can help you lower the interest rates that you get on the mortgage and make it easier to accept your application.

Steps To Getting Pre-Approved.

If you are looking to get pre-approved, you will have several factors determine whether or not you succeed.

1. Savings:

Savings is one of the biggest things that we will be looking at because it will show how much available capital you have to make a down payment. If you are able to make a larger down payment as noted above, this will help ease any bad credit history.

2. Income:

This is where your income comes into play. If you are going to be applying for a mortgage, your income will be a very important component of determining your risk to a lender. Any lender would end up reviewing your income consistency in order to ensure that you are going to be fully able to pay a monthly mortgage on the property. At the same time, they will be looking at your debt to income ratio which can give a better outlook on how much disposable income you have unaccounted for based on your total debt. If you have too much debt, it can end up offsetting your high income which can cause you to become much more risky to a lender. Are Offset Mortgages A Good Idea For You?

3. Credit History:

Your credit history is a major factor that is considered as well. In order to purchase a home, you are going to want to be sure to monitor your credit and to take steps to maximise it. Having good credit is one of the biggest things that can help you qualify for a mortgage at a great interest rate because you will be much less risky to a potential lender.

There are a lot of factors at play when it comes to getting a mortgage. If you are looking at how to get a mortgage with bad credit but good income, you should look to take steps to reduce your overall risk to a lender because it will maximise your chances of getting pre-approved for a mortgage. Here at Local Chester Mortgages, we can be sure to get you fixed up with a mortgage based on all of the factors that matter to you to ensure that you get the best possible deal.


May 2, 2018

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