Buying a house has never been easy; you tend to make a lot of plans for it. How much to save, how much to earn, are you really ready for this long term commitment? Once you determine on such basic factors, the next question would be to make a checklist of secondary factors. Factors like, where you should buy the property, how much are you ready to go as far as budget goes, which bank has the best to offer when it comes to home loans, which developer would you choose, etc.
The main factor which determines you chances to get a loan is your credit score. Your financial transactions information is stored with various credit bureaus. When you apply for any loan or a financial product, the lender checks your credit report to determine if they can lend you a loan. If you happen to have a score which ranges from 700-800, you can consider your credit score to be great. Anything which is lower than 700, can hurt your chances to avail any loan.
You must be wondering if I have a score lower than 700, will I not get a home loan. Is there a way I can opt for a home loans for bad credit? Do not worry; you can still get a home loan with a bad credit score. But you will have to work harder than others who have a good cibil score.
Here are 4 ways to buy a house with bad credit,
When you happen to have a bad credit score, you do not have any other option but to make a large down payment. You will have to cut on many personal expenses to save a lot of money, but it can help you in many ways. A larger down payment means, you can go for less loan amount and any housing finance lender would be happy to lend less than the actual market value of the property. You must be watching a lot of advertisements of various developers offering you a house at 99% loan option etc. For availing such a scheme, you cibil score should be excellent. You should at least consider making 40% down payment for the house you are considering, which can give you an edge for a good housing loan.
A bad credit score is not end of the road; you can still have your chances to avail a loan. One of those ways is to explain the lender why your credit score is bad. You must have lost your job or met with an accident because of which you were not able to make all your payments on time. Some lenders, despite of a bad cibil score, are ready to listen to your plea when you apply for a loan because even they want to lend you money. Just make sure your reasons are genuine and have necessary documents to prove it. This cannot assure a loan, but can turn out to be one the chances to avail one.
When you think of a loan, you always go for large financial institutes because of good home loan interest rates. There are many other smaller financial houses as well who would consider giving you a loan with a bad cibil report. The interest rates will be relatively higher than market standards, but you will be able to avail a loan.
This is the most important way you can avail home loan, without any hassles. There are many ways to get your cibil score up in less amount of time. You can start making all your payments on time for a start and get your cibil score up.
which can hurt you in the long run. It's better to consider your credit options before you make a wise decision to buy a house.