Whether you have good credit, poor credit, or no credit, figuring out your potential home loan options can be tough. Fortunately, there are lenders out there who are willing to work with folks with poor credit.
There are a few things you’ll need to set down in clear figures before moving forward. Lenders are going to be leery of would-be borrowers who haven’t developed a plan before applying.
If you walk into a lender’s office with little understanding of the standard options, you could end up getting rejected.
You will need to take a close look at your income history and be ready to present a number of factors to potential lenders. These include;
- Your annual income before taxes
- The price range of the type of home you believe you can afford
- Interest rates you believe you can successfully pay
- Expenses and any current debt
- How much you can afford to offer as a down payment
- Any assets that might be usable as collateral
Crunching the Numbers for Your Home Loan
Your first task should be to calculate your monthly income and subtract your monthly expenses. Any rent you may be paying at the moment needn’t be included since you will be replacing this with a monthly mortgage payment.
One piece of news that should put a spring in your step is the fact that, more often than not, monthly mortgage payments are cheaper than rental payments.
Renters generally pay for the upkeep of their living accommodations and other services as a part of the rental agreement.
As a homeowner, the services your current landlord provides would become your responsibility. You may be able to attend to the maintenance and upkeep of your new home for less than what your current landlord is able to manage.
Of course, the ways that moving into a new home will change these numbers can be difficult to predict. Lenders understand this. What they want to see is that you have made a reasonable plan to make a mortgage payment. This will go a long way to improve your chances of being approved.
Using a Mortgage Calculator to Reduce the Uncertainty
A home loan calculator will be able to help you determine your potential costs by factoring in standard rates and home loan practices that are not readily available to the average person.
There are a number of different types of home loan calculators you can use. All of them are available through The Mortgage Investment Group’s (MIG) website Migonline.com on their mortgage calculator page. They include;
- Additional Payment Calculator: this will help pin down some of the hard to predict expenses
- Monthly Payment Calculator: this gives you a range of monthly payments you are likely to be paying
- The Loan Refinancing Calculator: this gives you data to help you figure out your refinancing options
Lenders like MIG specialize in working with borrowers with poor credit. They are a great place to start if financing a new home seems like a stretch for your current financial situation.