Home Loans with Bad Credit: Easy Steps to Improving Your Approval Chances

Applying for home loans with bad credit is supposed to be a futile exercise, with rejection a practical guarantee. But in fact, there are lenders willing to grant mortgages so long as the application is strong enough, and the important boxes are all ticked.Formulating an application that can meet the basic requirements can take some time and effort, but the outcome makes it all worthwhile. Getting the application in proper order is the best route to securing mortgage approval - though it should be pointed out that different lenders can have different criteria.Nevertheless, a home loan can be secured confidently if a few key areas are dealt with in advance. In fact, focusing on satisfying these few points is generally the secret to getting the green light.What Are The Basic Criteria?It is essential that the basic criteria is met before anything else. Without these boxes ticked, the mortgage provider will not even consider the rest of the application. This stands for anyone seeking a mortgage, not just a home loan with bad credit. And admittedly, this only qualifies the applicant for consideration, not eventual approval.The criteria is the same as for any loan, with applicants needing to be over 18, to be a US citizen (or have legal long-term residency), and to be in full-time employment for at least 6 months. These are the first steps to securing mortgage approval, but other factors are key to that outcome.Understand, for example, that the chances of securing approval on a home loan are dependent on an ability to make the required repayments. And this, in turn, is dependent on establishing affordability, which is related to income level and the debt-to-income ratio that all lenders adhere to.Making The Mortgage AffordableAs mentioned, when applying for a home loan with bad credit, affordability is the key. The debt-to-income ratio effectively establishes the limit to what is affordable to an applicant. Its 40:60 rate means that no more than 40% of excess income can be used for repayments. For example, with $1,000 to spare, repayments cannot be more than $400.But there are some ways to increase the affordability of the mortgage. For example, making a large down payment plays a big part in securing mortgage approval. This is because the size of the required mortgage is lowered, thus making monthly payments and the overall debt lower.Another move that can see the affordability of the home loan increase is to agree a longer term. So, instead of a 25-year mortgage, seek a 35 or 40-year one. This can see monthly repayments fall by at least $150 per month. However, the overall cost increases because more interest was paid.Options Worth ConsideringFinding the right lender is just as important as accurately calculating an affordable mortgage repayment sum. When seeking a home loan with bad credit, it is perhaps more important. Searching online allows for faster results, with the comparison sites available helping to find the best deals within seconds.What is more, securing mortgage approval is made easier as the terms that favor your specific situation can be identified too. Online lenders tend to offer the best deals, while also offering the fastest approval terms.Still, be sure to contact any online lenders directly and to check them out on the Better Business Bureau website. It is the surest way of ensuring the best home loan deal is as good at it seems, and vastly reduces the chances of being taken advantage of.