Can you get approved for a home loan with bad credit? So, you want to get a home loan but you have some bad marks on your credit. Well, it’s still possible. There’s a process that you’re going to have to go through and there’s some tips and some tricks but I can tell you exactly how to get it done. Let’s go.
Insider Tips for Approval
I’m going to tell you the number one way to get approved for a home loan with bad credit. The second thing I’m going to tell you, some unknown tips on what lenders look at so that you can get approved and show them exactly what it is that they want to see and what they don’t want to see so that your loan does get approved.
Secret Strategies for Quick Approval
And then last but not least, I’m going to share with you the top secret to get your loan approved with bad credit in a matter of weeks, not months. So, let’s talk home loans, let’s talk mortgages, okay? Home loans, mortgages, this is the financing that you need when you are buying a home.
Understanding Bad Credit Scenarios
And if you have bad credit, it can make the process a little bit more daunting. And in many cases, people will tell you you can’t get approved at all with bad credit. Well, that’s not exactly true. It really depends on what we mean by bad credit. So, let’s kind of talk about that for a second.
Analyzing Different Types of Bad Credit
Many people think that they have bad credit. But that means different things for different people. Sometimes when we’re talking about bad credit, we could be talking about you pay people late or you have a lot of credit card debt and it’s really close to the limits. Even though you’re making your payment’s, you may have bad credit just because of your credit utilization and how you may have paid people.
Identifying Credit Issues
Even if you pay them on time, you may be really maxed out and have a low credit score and bad credit for that reason. Some people have bad credit because.. Well, maybe they didn’t pay people. Maybe something happened and you didn’t pay that car loan or you got that apartment and you got evicted from it or you got behind you on those credit card payments and now they’re not paid.
Checking Your Credit Status
Or in many cases… And this is so, so popular now. But I’m going to tell you how to get past it. It’s student loans. Many people went to school, took out student loans, got out and they were not able to pay those student loans and so it now reports on their credit as bad credit and their scores are low.
Determining Your Credit Situation
So, let’s talk about which one do you fall in. Are you someone that just has too much debt or are you someone that literally does have bad credit where you did not pay people on time as agreed. And so, the easiest way that you can find out which one you are is go to myFICO.com. I’ll give you a link below. You look up your credit. What is on your credit report.
The Importance of Credit Assessment
What does it say? How many trade lines do you have. What is your score, okay? What is going on with your credit? That is the first step. So, when we’re talking about bad credit, it’s a big difference between not paying your bills or having credit cards that are maxed out.
Initial Steps Before Applying
Because if you have some credit cards that are maxed out, that’s a little bit easier to fix than if you have like repossessions and foreclosures and things like that on your credit. So, first things first, look at your credit, see what’s up there before you ever start applying. And know which one of those two categories you fall into. Alright, let’s get to the next thing.
The Mortgage Application Process
You know, during the home loan process, your lender, your mortgage company, your broker; they’re going to do what’s called a qualification of you, okay? They’re going to pull your credit. Just have them pull your credit. You’re going to do an application with them where you tell them pretty much everything about yourself.
Understanding Mortgage Qualification
Your name, your Social Security, your date of birth, where you worked for the last 2 years, what kind of bank accounts do you have and then you’re going to list out all of your liabilities that aren’t listed on your credit report, okay? That is called a mortgage application. Or in the business, we also call it a 1003. 1-0-0-3. It’s a Fannie Mae number for the form. So, you may hear a 1003 application in the mortgage process.
The Role of Mortgage Loan Officers
That is just the initial application that you put in with all of your information. And what lenders are looking for of course is “Can you repay this loan?”. So, this is really important I want to really break this down for you. Because you got to understand what the lenders are looking for.
Licensing and Professionalism in Mortgage
And so, mortgage loan officers are the people that will help you through this process. And in order to do a mortgage loan, so anyone that you go to, they must be licensed with the state, okay? And it’s a really big deal, because mortgages had really got out of hand. People were giving people mortgages that they could not afford, called subprime lending.
Exploring Mortgage Options
And we’ll get into that in a second because a lot of that is back and I’m going to tell you there’s some things that you can use to benefit you, okay? So, prime is not a bad word. It is just that some people used it really wrong and they got into a lot of trouble. Mortgage loan officers are now licensed professionals, okay? They have to be licensed they have to go through background checks.
Choosing the Right Lender
They have to meet education requirements and standards like that. No more just coming off the street and giving people bad advice and mortgage loans that they can’t afford. So, that’s a really, really good thing. So now, that we know what a loan officer is, what their purpose is, we know that they work for lenders and their job is to find people like you who want mortgage loans.
Opting for Specialized Lenders
And so, let’s talk about that process and how you can use it to your advantage. There are different types of lenders. There are mortgage companies that only do mortgages. In fact, I used to work for a couple… I work for a great company called movement mortgage. I absolutely loved them. Still love the owners and the CEOs and we have a great relationship.
Benefits of Mortgage Companies and Brokers
But I’ve also worked for many banks like Chase, Bank of America and Wells Fargo. And although they do mortgage loans, they do all different types of loans and bank accounts and things like that, so mortgage loans are not usually their number one source of income or the thing that they do. I personally… Again, if you have bad credit, I recommend going to a mortgage lender.
The Role of Mortgage Brokers
A lender that only does mortgages or a mortgage broker. A mortgage broker is a company that is attached and they have a relationships, wholesale relationships with lots of different lenders and they can shop your loan around to see who will approve it at the best terms and rates.
Advantages of Mortgage Brokers
Now, you pay them a fee and then they find those mortgage companies for you. Again, if you have bad credit, I actually do recommend you finding a mortgage company or a mortgage broker, okay? Not going with a bank like Wells Fargo, Bank of America, blah, blah, blah. Just because in many cases they are not going to have programs designed for people with bad credit.
Leveraging Mortgage Specialists
Just being really honest with you, as of the timing of this video, most of the large banks do not have any interest in that. They or their appetite for risk is just not there. So, you want to go to who will lend you the money and you want to understand that companies that only do mortgages, they are going to be more favorable and have lots more programs, okay? They’ll usually have lots of different programs not just 1 or 2 or 3 hundreds of different programs and different caveats and different guidelines.
The Power of Mortgage Experts
Or you know, some mortgage brokers have tons of lenders, they have all different types of the headline. So, this is where you want to be if you have that credit. Additionally, I’ll give you one quick tip. With the mortgage broker in the mortgage bank, their loan officers only do mortgages all day every day, that’s the source of their income.
The Advantage of Mortgage Professionals
In many cases, they have the time and the resources to help you fix your credit, okay? They have lots of different systems that tell you how to restore your credit, they know exactly what needs to be paid or not be paid. Things like that. So again, this is just Noelle’s opinion for many years of experience and education telling you stick with probably a mortgage bank or a mortgage broker if you have bad credit.
The Subject-to Strategy
And that is why because they want to get your loan fixed. And they want to help you with your credit and things like that. And now Noelle is going to give you the granddaddy of how to get approved with bad credit. So again, go to Mortgage Bankers. You know, pull your credit things like that.
A Personal Success Story
But now I’m going to give you what I did, okay? This is literally what I did when I lost everything in 2009. And I literally had to move back with my parents, me, my husband, my kids and moving my parents basement just because I had tried to invest in real estate. I was a total idiot and I didn’t know what to do and I ended up losing everything.
Exploring Alternative Approaches
One of the things that I learned that helped me get to millionaire status was I learned a concept called “subject-to”, okay? And I learned to find people that were already in foreclosure or pre foreclosure or bankruptcy or divorce or whatever a property problem they were having. And those people were able to sell me those properties and leave that mortgage in place, okay? So now, I got a house but I didn’t have to get approved for a mortgage loan. I didn’t have to deal with banks at all.
And to this day, Noelle still rarely deals with banks, okay? Once you get away from the traditional way to do things, okay? When I gladly will tell you the traditional way, I worked in that business for many years. But it’s way better on this side on this investor side.
The Power of Creative Solutions
And what you can do is help people that are in these situations where they can’t keep their properties and that’s an opportunity for you to get properties for pennies on the dollars, without spending very much money and without ever having to at any bank for a loan. And you still get properties. Again, properties you can either live in yourself or make money on.
Empowerment in Real Estate
And that’s what I do now and that’s what I teach other people to do. So, if you’ve been watching this video, again, hopefully I gave you all the information of how to do the traditional way. But know that you can do something called subject to where the work the home can be sold to you without the mortgage being paid off.
And it’s coming to you. And it doesn’t have to leave out of the person’s name, it doesn’t you know this is not an assumable loan. You’re not gonna go to the bank and ask them to put the loan in your name. No. The loan is going to stay in that person’s name.
Final Words of Encouragement
I actually have a whole video on how to do subject to I’ll put a link there so you can understand the whole concept because it’s really awesome concept but some people a lot of people don’t know it, okay? But it’s an awesome way again to start getting properties with bad credit, with foreclosures.
The Promise of Possibility
You can be in the worst financial situation your oneself. But if you have money and have shown that you can now take over this property, boom. That’s what we’re going to do. So, as real estate investors, again, we do not buy properties a traditional way. And yes you can get approved for loans with bad credit.
Yes, you can get a mortgage with bad credit and yes you can get properties and become a real estate investor or a homeowner with bad credit.