How to Get a Mortgage with Bad Credit
A mortgage loan is given against the mortgage of a residential or commercial property. If you own land or property, then you could mortgage it with the lender to raise funds. The property's market value is assessed and the loan is given as a certain percentage of the property's current market value. This could range anywhere from 40% to 60% the current market value.
This product is a secured loan since the loan is secured against your property. Hence, the interest rates are low. Also, it translates to a higher loan amount disbursal depending on the property's market value.
You could use the loan for any of your personal requirements, for business expansion, funds for office equipment or recover from a financial crisis. A LAP or Loan Against Property suits all kinds of budget and needs and has convenient repayment options.
The Positives of Loan Against Property:
Low-interest rates, convenient repayment options, and flexible tenures.
The Negatives:
Has a long approval process since the title deeds of the property needs to be verified by the bank's panel of surveyors and field agents. If you are unbaling to pay back the loan due to any reason, your property will be put up for auction by the bank, and you might lose your asset unless you pay back the loan amount.
Can I secure a mortgage loan if I have bad credit?
Since this is a secured loan, you won't have much of a problem with the loan getting sanctioned. But having bad credit is still a major cause for concern since the interest rates would be on the higher side if your loan application is approved.
How do I improve my score so that my loan application is processed?
• By consistently following measured steps, you can improve your score so that your loan application is approved.
• Pay your bills on time, every time.
• Make sure that you don't exceed more than 50% of your credit limit. This helps you to keep your credit utilization ratio at a lower rate and has a positive impact on your score.
• Apply for new accounts only when needed. Multiple hard inquiries in your credit report reflect that you are ‘hungry' for credit and may not be able to fulfill your debt obligations.
• Remember to pay your dues in full rather than paying the minimum amount for your credit cards.
Need Help?
If you think you need help with improving your credit score, then CreditMantri can guide you in the most comprehensive way, so that your loan application is approved. Click here to sign up for free and get a free credit health check, today!