Low Credit Scores Do Not Mean You Will Be Denied A Home Loan
Consumers with a low credit score fear loan denial which often prevents them from applying for a mortgage. In 2016 the fact that you have a low credit score should not stop you from meeting with a mortgage broker to discuss options available for consumers with credit scores below six hundred.
The higher the credit score; the more likely it is consumers can repay the loan according to most mortgage lenders. This does not mean that consumers with less than perfect credit should not consider buying a home. What it does mean is that homeowners with credit scores under six hundred need to keep in mind a few things as they go through the process of buying a home.
Lenders are loosening their credit requirements for homeowners. In fact thirty three percent of mortgages in the spring of 2014 were given to borrowers with credit scores below seven hundred; a six percent increase from the previous year. Mortgage lenders are relaxing their credit score requirements and beginning to lend money to homeowners with less than perfect credit scores. This is especially true when borrowers opt for government-insured FHA loans. Homeowners with credit as low as five fifty, with down payments of ten percent are getting mortgages.
When consumers are looking to purchase a home with less than perfect credit there are a few things to consider. One is that lenders are slowly becoming less strict with requirements on consumer credit scores. Another is that lenders are becoming aware that there is a difference between applicants who are just irresponsible in making payments on time and applicants who have fallen on hard times with the loss of a job or astronomical medical bills that create an unreasonable debt demand.
When it comes to having less than perfect credit scores, lenders are becoming more and more concerned with payments that are being made on time. When an applicant is making payments on time, especially rent payments, lenders are more willing to consider lending to them.
Working with a mortgage broker helps consumers looking for a mortgage with less than perfect credit. There are two different methods uses when approving and denying mortgage. Lenders either approve or deny your mortgage based on automated or manual underwriting. When a client is considered a worth credit risk mortgage brokers will initiate conversation between lenders to get them to look at more than the client’s approval or denial within the automatic mortgage approval system. In these situations mortgage lenders are prompted to look into the other qualifications borrowers bring to the table.
Just because your credit is less than perfect it should not prevent you from at least meeting with a mortgage broker regarding the options that are available in your situation. A lender may offer you a mortgage with a higher interest than those consumers with impeccable credit. This however does not lock you in forever. As you continue to get your credit in check your score will increase and overtime this will allow homeowners with higher interest mortgages to refinance their current mortgage at lower interest rates.
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/.