Tuesday, February 23, 2016

Getting A Mortgage With Less Than Perfect Credit

Many people seeking to purchase a home think that because of their less than perfect credit score that they are not going to be eligible for a home loan.  This is no longer the case.  With less stringent requirements, more flexible mortgage options and historically low interest rates on home loans getting an affordable home loan even with a low credit score is feasible.  Here are a few things that you will need to take into consideration if you are seeking a mortgage with a low credit score.
  • Be Prepared To Pay More
Although homeowners with bad credit can be approved for mortgages it is important that they realize they will be paying more than those with decent credit scores.  Be careful when seeking out a mortgage broker to be sure you are working with a home loan officer looking to provide you with the best mortgage for you.  Watch out for dodgy characters looking to prey on individuals who they view as less than financially savvy because of their low credit scores.  This is often the perception of buyers with less than perfect credit scores.
  • Refinance As Soon As Possible
Don’t think that a low credit score means you are signing your life away when you purchase a home.  Buying a home should never be viewed as a bad deal.  It does however mean that you need to maintain and improve upon your credit and refinance as soon as you are no longer viewed as a risk to lenders.  This can take as little as two years if you are consciously working to improve your debit to credit ratio.  A home loan when you have a low credit rating should be seen as a short term solution that is used to get you into a home while you work on improving your credit.  It is always a better solution to sock away money into the equity of a home than wasting money on rent payments.
  • Understand Your Options
Work with a mortgage officer that specializes in obtaining mortgages with less than perfect credit.  Ask about the available options.  Although thirty year fixed mortgages are popular this does not mean it is the right option for your situation.  An adjustable rate mortgage may be a better option while you work on fixing your credit score.  Many people fell on hard times during the recent recession that are not typically bill skippers.  Hard-working, responsible people often have legitimate reasons for falling into a vicious cycle of late payments.  Consider all of the options you have when you are looking to become a new home owner.
  • Obtain A Co-Signer
If you have a substantial number of assets with equity you may not need a co-signer even with poor credit.  Items such as motor homes, cars paid in full all work as forms of collateral against default on a mortgage and are seen as beneficial to lenders.  However, if this is not the case you may need to look for a relative who is willing to sign on your behalf.  A co-signer is essentially agreeing to make payments on your behalf if your loan should default at any time.
Although homeowners with credit on margin will pay lower rates than those with less than perfect credit it is possible for most everyone to obtain a mortgage in 2016.
Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

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