Payday loans are a popular way to get money between paychecks. They can be used for emergencies, such as car breakdowns, but they are usually high-interest and can also damage your credit score. It’s always a good idea to shop around for the best deal. This can mean borrowing from family or friends, asking for overtime, or using a personal loan from your bank.
However, before you take the plunge, it’s important to understand the risks. A mortgage is no exception. If you are unable to make the payments, the lender can seize your home. There are ways to mitigate these risks, however. You can seek out nonprofit credit counseling agencies to help you manage your debt.
Some lenders may not even mention their own rules of thumb. Others may be more savvy in terms of how to evaluate an applicant’s payday loan history. For example, you could consider a specialist mortgage lender. The company will use human underwriters to evaluate your application and look for the most cost-effective solutions.
Another good idea is to consult a broker. Not only can they compare lenders on your behalf, but they can also help you choose which type of mortgage is the right one for you. In addition, brokers have access to the entire mortgage market. While you aren’t likely to get the same low rates as if you were going it alone, you can still find a great loan.
To be honest, there aren’t that many options when it comes to getting a mortgage. Whether it’s because you have a payday loan or you’re simply on the hunt for the best rate, your chances of finding the perfect mortgage for you are slim.
One of the easiest and most effective methods is to use a broker. Their knowledge and expertise will help you get a better deal. Depending on your situation, you may need to get a larger deposit than you think you can afford. Thankfully, the average lender allows you to borrow 4.5 times your annual salary, which is more than enough for most people.
Getting approved for a mortgage may be the most difficult part of the process. Lenders have their own rules, but they do have a few standard guiding principles. They’ll often ask you about your most recent payday loan, as well as the other relevant facts. Those facts may include the number of payday loans you’ve taken, the length of your payday loan and how you got the loan in the first place.
Of course, your best bet is to be honest with your lender. Many will ask about your payday loan even if it’s no longer on your credit report. By shedding light on this information, you’ll be able to save yourself some headaches.
Other options for a payday-less mortgage include taking out a personal loan from your bank or credit union, borrowing from friends and relatives, and even using a side hustle. These options can be cheaper and less taxing on your credit score than a payday loan.
