Chapter 3: Improving Your Chances


How to Improve Your Chances to Qualify for a Bank Loan.

Before we get started looking at methods to get houses without qualifying for bank loan, first be sure you can’t get one. It may save you a lot of work, and it opens up more possibilities for home purchases and help from real estate agents.

You might be surprised to find that there are ways you can get conventional financing, even though you never thought you would be able to. More and more lenders are looking at people with less-than-perfect credit. Usually the interest rates are higher than average, but you get into a house. You can refinance later, after showing how you reliable you are making your monthly payments.

Here are a few suggestions to get mortgage companies to look at you.  If this method sounds likely for you, try talking to a reputable home loan consultant, and see what your chances are. This would be one of the easiest ways to get into a house.


Can You Fix Your Credit Report?

You might find that your credit is easier to fix than you supposed.  Have you seen a copy of your credit report lately? You are entitled to a free copy ofyour credit report if you have been denied credit, employment, or insurance within the last 60 days. If you were denied because of credit, the company should give you notice and give you the contact information for the credit bureau.

No one can legally remove accurate negative information from a creditreport (no matter what those ads say) but you can dispute mistakes or outdated items for free. Request an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Ask the credit-reporting agency for a dispute form or submit your dispute in writing, along with copies of any supporting documentation. You don’t need a credit repair organization to do this. Everything a credit repair clinic cando for you legally, you can do for yourself at little or no cost.


Look into Special Loans for Bad Credit

Concentrate on those lenders who specialize in working with those who have had credit problems. Spending time (and money) applying to lenders who do not work with credit blemishes will accomplish nothing. If you have local sources that you know will consider such loans, take advantage of them.

Other sources, available online, such as Lending Tree, have a large networkof lenders nationwide, including those who have experience in dealing withcredit problems.


Have a Home Telephone

If you have a telephone in your home and in your name, it helps increase your chances of getting a loan. Lenders worry about people who don’t havea home phone. I know that today a lot of people today use their cellular phones as their home phone, but a land-line still looks better. It shows stability and roots, at least to a bank.


Live in One Place for a While

Again, banks want to see that you have some stability. It helps if you have lived in one place for at least 6 months. If you have just moved, show that you lived somewhere before this for at least 6 months (and hopefully several years).


Have a Good-sized Down Payment

The larger the down payment, the better your chances will be to get a loan. (See “The 30/70 Rule” in the next chapter.) The more money down, the happier the bank is to work with you.

And if you can show that you have saved the money over a period of time, instead of borrowing it, it looks even better to some lenders. Not all lenders ask where you got the money, so if you did save it, be sure to point that out.


Show That You Have Good Character

Banks and lenders want to know that you are dependable and reliable.  Show this when you talk to them by showing up to meetings on time, dressing nicely, and having your information organized.  Have your bank account and credit card account numbers and financial information ready to show them.

It will help if you have someone you know write you a financial letter of reference, such as someone whom you borrowed money from and who you paid the money back to.

Be ready to show them any sources of credit you may have that may not be on your credit history, such as paying the cable or cellular bills regularly. Even information about a loan from a relative or friend that was paid back in installments and on time will help.  Be ready to tell them how you will be able to pay this loan back. 



This has been an excerpt of the book by Alex Dey called Buying a Home When You Have Bad Credit.



Buying a Home When You Have Bad Credit is written by Alexis Dey, Copyright © 2005-2006 Mohave Publishing. All rights reserved. This book is protected by international copyright law. You may not otherwise resell, reproduce, distribute, publicly perform, publicly display, or create derivative works of this material, unless authorized by Mohave Publishing.  http://I-Can-Buy.com