Buying A House With Bad Credit
Probably the most awful part about purchasing a home is having a bad credit and its not about being difficult. It is rather about the huge interest rates and high fees you will have to shell out towards the home mortgage loan. The following practices could help rectify the credit and subsequently lower the rates you will ultimately pay.
If you do have time on hand, you could start repairing the credit by a bit. This will help you easily find a lender and also get obtain competitively lower interest rate. Just paying 2% less will benefit you by $70,000 by way of interest over a few years. We suggest some ways you can repair the bad credit account.
First off, see what you have on the report. Try an online search for some "free credit report." And If some agency denies you a credit because of the report of a local agency doing credit reporting, you may ask for a credit free statement from the same agency inside 30 days. What can you do torepair what you have on that report?
Is there anything you find disputable in the report? Then write and inform the agency about the same. Put down what is not as per facts and they are duty bound to investigate this. Also, ensure you send copies of any cancelled checks and any documents you may have by certified mail only.
The agency is bound by law to get in touch with the source that provided the doubtful facts. If no confirmation is received in 14 days, they must then cancel the item before sending an updated account to you. You are within your rights to demand that they dispatch a rectified report to all the creditors who have earlier received the credit report since the past six months. This is not done automatically and you must ensure that you make a demand for it.
If the credit is less than $500, or even more than one year old, the creditors will not really take the trouble to respond. "Fixing" the credit report in this manner is definitely possible even if its contents are correct anyway. You still have a right to debate about them once more after a 30 day period.
In the long run, there are two ways you can fix bad credit. You should stop charging purchases to your credit card. Don't maintain over five credit cards. Also, keep a balance that shows half than the limit on each card, even this requires moving debt from one of the cards on to another. Prevent yourself from making a worse credit score and only time can be of help.
It is important to note that just a respectable credit score can bring you about 95% financing. Depending on the all-important credit score, even the interest rate fluctuates from 0.5% to 4%, which is high as compared to conventional loans. Think about the idea of paying a higher interest to obtain a loan bereft of fees if you can avail of a refinance at lower rates the following year.