Do you want to buy a home, but don’t think you will be approved for a loan? Right now is a good time to buy a home. In my more than thirty years selling real estate, I have never seen values as low as they are today. There has never been a better opportunity to find a home to raise your family. Maybe you’ve had some credit problems in the past, or maybe you just don’t have any credit. So how do you start looking for a home when you think you can be denied?
First of all, never think that just because you were denied before, you will be denied today. I work with many different lenders who can make things happen for clients with different needs. You will find that real estate agents who have been in business for a long time have cultivated these relationships and they can be of great help. If you try it and you are not qualified, then …
Work on fixing your credit. If you know you have some backlogs to take care of, work on those things first. The general rule of thumb with things like credit cards is to pay off the ones you owe the least first. Pay the minimum payments on all your cards and pay a higher amount where you owe less. (When paid, go to the next one.) Before you know it, you will have addressed that huge debt.
If you have no credit, a good place to start is what I call the piggyback system. Save $ 1,000 and go to a local bank (I like United Bank) and put it in a savings account. Then apply for a $ 1,000 loan secured with the savings account. You don’t need any credit to do this, they will block your access to the savings account and loan you $ 1,000. You can then take this money to a second bank and do the same. At the end of the 12 months, you will have $ 2,000 in savings and a payment history on two installment loans. (Warning: you can do this with as many banks as you want as long as you can afford the monthly payments)
Another thing you can do is get a secured credit card. Orchard Bank offers a great secured credit card. When you get a secured card, they make you make a deposit (usually around $ 200) and that becomes your credit limit. Use your card and pay every month. After 18 months, your deposit will be refunded, and if you’ve had a good credit risk, your credit limits will generally increase. One thing that is very important when you are shopping for a secured credit card is to make sure that they report to the three major credit bureaus. Some cards don’t and if you do this with those cards, you’re wasting your time.
By following these techniques, you can get a loan approved in no time. It’s about setting a goal and achieving it.
