Everybody needs a home at some point, and so it stands to reason that everyone at some point requires a home loan.
Of course there are some lucky people among us who are able to pay for their homes in cash or at least without a loan, but for the majority of us a property is the most expensive thing we will ever pay for and something that we can certainly only afford to purchase very few times.
As such it is a terrible situation when someone finds themselves unable to get a home loan and as such unable to get onto the property ladder.
The kinds of people who get turned down from a home loan are generally those who have a bad credit rating and that means that they are the sort of people who really need to get a home loan and who certainly won't be able to pay for a home on their own.
So the question is then, how does someone in this situation go about getting a loan so that they can move into a home? Fortunately there are some techniques that they can use which we will look at here.
The first thing to do is to shop around for different loans companies as there will normally be at least one that is willing to pay for your home loan and that will specialise in loans for those who have worse credit histories even.
Finding these companies can then mean that someone otherwise unable to get a loan will still be able to.
Of course such companies are likely to charge more and they need to do so in order to cover their own back and to protect their investments.
The way a loans company works is to give you cash to make your purchases, so that you can pay it back to them with a slight interest - this then is just the same as you putting money into a savings account in order to get interest on your cash.
If you have a bad credit rating though, these companies will then be concerned that there's a chance you won't be able to pay back the loan and this would be the equivalent of your bank going bust and not allowing you to draw out the money that you saved.
Thus they charge higher interest to ensure that they have recouped more of that before you go bust, and so that they make enough profit from those investments that go well that they can afford the odd failure.
Shopping around will still allow you to get a cheaper loan however as there will be multiple companies willing to loan to those with bad credit.
Likewise you can help reduce interest by taking out a smaller loan which you can in turn achieve by paying as much of your deposit up-front as possible and buying a smaller house.
There are also countless ways you can improve your credit rating - by paying off other debts, by moving away from other people with bad ratings, and by ensuring none of your cheques or debits bounce.
Of course there are some lucky people among us who are able to pay for their homes in cash or at least without a loan, but for the majority of us a property is the most expensive thing we will ever pay for and something that we can certainly only afford to purchase very few times.
As such it is a terrible situation when someone finds themselves unable to get a home loan and as such unable to get onto the property ladder.
The kinds of people who get turned down from a home loan are generally those who have a bad credit rating and that means that they are the sort of people who really need to get a home loan and who certainly won't be able to pay for a home on their own.
So the question is then, how does someone in this situation go about getting a loan so that they can move into a home? Fortunately there are some techniques that they can use which we will look at here.
The first thing to do is to shop around for different loans companies as there will normally be at least one that is willing to pay for your home loan and that will specialise in loans for those who have worse credit histories even.
Finding these companies can then mean that someone otherwise unable to get a loan will still be able to.
Of course such companies are likely to charge more and they need to do so in order to cover their own back and to protect their investments.
The way a loans company works is to give you cash to make your purchases, so that you can pay it back to them with a slight interest - this then is just the same as you putting money into a savings account in order to get interest on your cash.
If you have a bad credit rating though, these companies will then be concerned that there's a chance you won't be able to pay back the loan and this would be the equivalent of your bank going bust and not allowing you to draw out the money that you saved.
Thus they charge higher interest to ensure that they have recouped more of that before you go bust, and so that they make enough profit from those investments that go well that they can afford the odd failure.
Shopping around will still allow you to get a cheaper loan however as there will be multiple companies willing to loan to those with bad credit.
Likewise you can help reduce interest by taking out a smaller loan which you can in turn achieve by paying as much of your deposit up-front as possible and buying a smaller house.
There are also countless ways you can improve your credit rating - by paying off other debts, by moving away from other people with bad ratings, and by ensuring none of your cheques or debits bounce.
Source...