Are you planning to buy a new home or refinance an existing mortgage with a loan? The first thing to verify your eligibility for a mortgage or a loan is your credit numbers. Applications for mortgage and loans for bad credit score are often rejected due to worthiness. If you handle your finances on your own, there are simple ways on how to improve score and get a mortgage.
Ask the following questions and try these time-tested tips to improve rating and avail a loan for low cibil score.
How familiar are you with the different types of mortgages in India?
According to the Section 58 of the Transfer of Property Act-1882, a mortgage is the transfer of an interest towards specific immovable property in order to secure a loan giving rise to a liability.
The following types of mortgages are offered by banks and loan lending organizations in India:
- · Simple Mortgage
- · Mortgage by Conditional Sale
- · English Mortgage
- · Mortgage by deposit of title of deeds
- · Anomalous mortgage
Mortgage is a secured loan which is used to finance a real estate property like:
- · Land
- · Flat
- · Commercial space
Connecting the secured loan availed with the credit report, you can still get mortgage irrespective of having bad scores by pledging a collateral asset.
What credit score will fetch a mortgage?
If you use a credit card and have bad debts against your account, CIBIL report will flash it on a monthly basis. In order to get it, do a CIBIL consumer login and check your score. CIBIL report categorically differentiates between the various types of secured and unsecured loans.
To get this benefit approved, your credit rating should be healthy, usually in the range of 720 and above. Prominent lenders don’t approve for bad credit number less than 720. Even if your application is approved, expect the interest rates to be viciously high and unacceptable as far as market trends are concerned.
How your credit score change with an enquiry?
In case you are found to have a low rating in CIBIL report, the bank and lenders are likely to leave their negative impact in the form of enquiries. With a low score, any enquiry will further dent your chances of improving on the CIBIL report ratings.
Take a refinance on the unsecured loans only when you have a healthy score to back your worthiness.
How to make a successful attempt using CIBIL report online?
Mortgage principal sum and approved lending rates vary based on the score in CIBIL report. Even in cases where you have an unpaid debt, you can get mortgage loan for bad credit scores where you have not made any significant financial default in the last six months.
In cases where you have been using your credit card well within your utilization threshold, or have not taken a home/car/personal loan, your chances of getting mortgage even with a low score rise significantly.
Applying to Mortgage with bad scores
While applying for a mortgage despite having a poor CIBIL score, it is still relevant to research on the deals. If you are unsure about which deal will fit your pocket, start with the term of mortgage. A 30-year term is a popular choice, but if your CIBIL scores are low, you can opt for an adjustable rate mortgages.
Adjustable rate mortgage allows an individual to repair and maintain the credit score while paying at a reasonable interest rate, much lesser than those offered on fixed-rate mortgages.
In cases when you are falling short of numbered cut-off due to medical bills or personal emergency, use CIBIL report to your benefit by demonstrating how you have been an ethical consumer all this while.
Grow your chances of getting mortgage substantially with these tips.