If you have poor credit, here are tips to help qualify for a loan.
Larger Down Payment
Essentially, a down payment reduces risk for the lender. You have skin in the game. They have a buffer. An excellent figure is 20%, which allows you to avoid private mortgage insurance (PMI).
Even with a large down payment, it?s helpful to have ample cash reserves on hand. It will make lenders comfortable that you can absorb the unexpected, such as a failing hot-water heater or a hefty medical expense.
Be able to verify that you?ve paid your rent on time consistently for 12 to 24 months. FICO estimates that less than 1% of credit files contain rental entries, so it pays to investigate alternative credit reporting tools.
Darryl founded Smith Financial Advisors Inc. in 2006 after over 30 years experience in financial services including Mergers & Acquisitions, Investment Banking and traditional Commercial Banking activities at Bank One. Smith Financial Advisors is a Registered Investment Advisor in the State of Illinois. The firm specializes in Investment management, financial planning, and retirement planning.