Should You Consolidate Your Debt?

If your in the market for a home loan, however your credit isn’t all that you would like for it to be, it’s important that you know that there is some hope. It won’t be as easy as someone with spotless credit of course, but it is possible.

There are some things that you can do to increase your chance – they are:

Find a property with built in equity. If you can find a home that already has equity, it may be much more simple to getting a loan on the property. To the lender, this could mean that you’ve already made some down payments on that property. You’ll have to consult a mortgage broker to see how this helps you.

Be creative in your financing. Maybe the seller will take a second mortgage on the property in fact. You can save a down payment by entering into a contract with the seller that you’ll make monthly payments with interest in lieu of a down payment.  This is actually sometimes referred to as a lease option.

These days there are a ton of lenders that will give you a one hundred percent financing, that is if you have a good credit score. However, paying a down payment will lower your interest rate significantly.

If it’s a timing concern, and you think that in a few months you’ll be able to have saved enough for a down payment, then it’s probably better to wait, if saving on your interest rate is important to you. This is good financial planning on your part since you’re planning ahead for a lower interest rate.

One thing to consider on that note however is that if it’s a mortgage that you feel you must take now, and that any amount of time is not going to help you, then the option of refinancing is always there for you down the road.

Don’t believe mortgage brokers when they tell you that they can’t do anything for you. You have to keep shopping for one that will, since some brokers are more flexible than others, due to good relationships that they have with the lenders directly.

One way to increase your chances is to go with an online service, that will submit your application to various lenders, basically letting them fight for your business, giving you a bit of an advantage. Even then however, your loan application can get turned down if your credit is that bad.

At this point it may be a good idea for you to take a good look at your problem, get credit counseling, and consolidate debt if necessary. It may hurt to wait for that loan, but will only be helping your future, instead of digging your hole even deeper.

About the author:
Jack Blacksmith writes essentially for , a website on personal finance . His abstracts on negotiate debt settlement are published on

Chocolate Money has access to many lenders and specialises in finding finance for people with credit issues, self employed, people unable to verify their income and most other non standard situations. Chocolate is able to facilitate high lending home loans, creative low documentation loans and very competitive credit impaired loans. As the exclusive supplier of finance to the Master Builders Association in Victoria, Chocolate Money focuses on providing options and solutions for the self employed as well as PAYG people.

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